The Fed's monetary policy was not changed at the Federal Open Market Committee meeting although the panel noted "economic activity decelerated somewhat" in the first half of 2012, according to the policy statement released after the meeting Wednesday.

The statement said the FOMC "will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."

The FOMC expects only "moderate" growth in the near future, increasing "very gradually." Global financial strains "pose significant downside risks," although inflation will remain at or below target.

"To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy," according to the statement. "In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."

Operation Twist will remain in effect through year-end, and the Fed will continue "reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities."

Richmond Fed President Jeffrey M. Lacker dissented, preferring "to omit the description of the time period over which economic conditions are likely to warrant an exceptionally low level of the federal funds rate," the statement said.

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