Federal Reserve to hold rates longer, cuts growth forecast

"With respect to growth, the characterisation of the economy is surprisingly little changed despite the slew of good data in recent months," said Michelle Girard, an economist at Royal Bank of Scotland.

Brighter signs from the US labour market, the manufacturing sector and resilience from the consumer had led to some speculation that the Fed may raise interest rates sooner than many expected.

Until today, Mr Bernanke had said interest rates would be kept on hold until at least the middle of 2013.

"This is a new and more emphatic assertion of its commitment to an easy policy stance for the next few years," said Kevin Logan, a US economist at HSBC. As the forecast was digested on Wall Street, US government bond prices climbed.

The FOMC's pledge not to raise interest rates until 2014 came as the committee for the first time published forecasts of when individual policymakers believe rates should be raised.

Five policymakers said 2014, a further four said the year after and 2 more opted for 2016. Meanwhile, a further three said rates should be raised this year and another three picked 2013.

Although the Fed did not identify members by name, the central bank hopes the publication of the spread of forecasts will give investors a clearer sense of the future direction of monetary policy.

Amid the blitz of forecasts, the Fed also said that it would target a rate of 2pc for long-term inflation. It's the first time that the Fed has made explicit a target that has long shaped its policy.

The central bank also lowered its forecast for core inflation this year to a range of 1.5pc to 1.8pc.