Fed resumes policy meeting, eyes alternative tools

The U.S. Federal Reserve resumed its policy meeting on Wednesday at which officials will consider ways to revive the economy now that their traditional interest-rate cutting tools have been exhausted.

The Fed board and regional Fed bank presidents began meeting on Tuesday to explore ways to pull the world's largest economy out of a year-long recession. The meeting resumed at about 9 a.m. (1400 GMT) on Wednesday, and the Fed will issue a policy statement around 2:15 p.m. (1915 GMT).

At its last meeting in mid-December, the U.S. central bank reduced its target for the benchmark overnight federal funds rate to zero to 0.25 percent, and said rates would likely stay unusually low for some time.

The Fed has flooded markets with dollars, more than doubling the size of its balance sheet to more than $2 trillion, and it may shed more light on how it plans to support broken down credit markets in its statement on Wednesday.

Investors are particularly keen to see whether the Fed signals a willingness to begin buying long-dated U.S. government debt.