WASHINGTON (AP) -- The Federal Reserve is expected to leave interest rates at record lows as it ends a two-day meeting Wednesday with policymakers having cause for optimism as well as caution.
The Fed is also likely to repeat a pledge to keep interest rates low for a while to sustain the fragile economic rebound.
Manufacturing activity is picking up. Businesses are spending more. And Fed Chairman Ben Bernanke has expressed confidence that the nation won't fall back into a "double dip" recession.
At the same time, the recovery remains vulnerable to threats: Europe's debt crisis, an edgy Wall Street, cautious consumers, a fragile housing market and high unemployment.
Ultra-low rates serve borrowers who qualify for loans and are willing to take on more debt. But they hurt savers and people living on fixed incomes.
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