Releasing the minutes from its December meeting, the central bank committee left the lending rate at zero to 0.25 per cent. There has been no change to the rate since last December.

The Fed gave a more cheerful assessment of the economy than it had after its meeting last month.

It said that the environment had “continued to pick up”, with an improvement in the labour market, moderate expansion in household spending and signs of improvement in the housing sector.

But the Fed said that with considerable slack remaining in manufacturing capacity, there was little danger of inflation.

Also, although improving, unemployment is still high at 10 per cent and credit continues to be difficult to obtain, the bank said.

There have been concerns that the Fed’s ultra-low rates policy would fuel inflation.

However, Ben Bernanke, the Fed Chairman, considers low rates to be vital to sustaining the economic recovery.

The US Dollar Index, which tracks the greenback against other main currencies, rose to 76.983 points after the Fed’s more optimistic outlook for the economy, up from 76.815 pre-announcement.