Fed votes to keep US interest rates below 0.5%

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The US Federal Reserve has announced it will maintain interest rates between 0.25 an 0.50 per cent.

Last night the US central bank said short-term risks to the economy had reduced, but that inflation was still below its 2 per cent target, according to the BBC.

The Federal Reserve calculates US inflation rates at 1.6 per cent.

A statement by the Federal Open Market Committee blames low energy prices for the drag on inflation.

The group also says household spending was growing and that unemployment had fallen for the last two months.

Investors expect the Fed to raise rates later in the year, with the first increase coming in autumn.