As expected, the Federal Open Market Committee decided to keep its target for the federal funds rate unchanged at 1.75%, but it maintained a tightening bias.

In its decision, the Fed noted increasing signs that weakness in demand is beginning to abate and economic activity is beginning to firm.

“With the forces restraining the economy starting to diminish, and with the long-term prospects for productivity growth remaining favorable and monetary policy accommodative, the outlook for economic recovery has become more promising,” it said in explaining the no change decision

However, it noted that downside risks remain. “The degree of any strength in business capital and household spending, however, is still uncertain. Hence, the committee continues to believe that, against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future.”

Markets, which had strengthened from their midday lows, have had minimal reaction to the decision.