Fed maintains stimulus despite restraints on economic growth
A police officer guards the Federal Reserve building. [AFP]

The U.S. Federal Reserve kept its stimulus program in place as expected Wednesday, but said that the government's fiscal policy is a drag on the economy.

"Economic activity has continued to expand at a moderate pace," Fed policy makers said at the end of a two-day policy meeting.

Unemployment continues to be "elevated" despite some apparent labor market improvement, and inflation remains low and stable.

In an update since its September 18 policy statement, the Federal Open Market Committee also said that household spending and business investment had grown, while the recovery of the housing sector had eased "somewhat" in recent months.

But it added, as it said in September, that the government's tight spending policies are holding down growth.

"Fiscal policy is restraining economic growth," the FOMC said.

[Image via Agence France-Presse]