Washington - The was widely expected to keep interest rates steady in the range of zero to 0.25 per cent when it releases its periodic decision on Wednesday.

The Federal Open Market Committee, which began meeting on Tuesday, is to announce its decision at 1815 GMT Wednesday.

The central bank has been working to revive borrowing and stabilize the financial system amid a serious ongoing recession in the United States, which has cascaded into foreign markets.

The bank could also expand its purchases of asset-backed securities and treasury bills with an ultimate goal of freeing up more credit lines.

As it wrestles with the expanding financial crisis, which has slowed credit flow to a near stand still, the Fed in December dropped interest rates to a historic low of just over zero per cent.

Over the weekend, Fed chief Ben Bernanke said that the recession could end this year if the banking and financial systems can be stabilized.

"We'll see recovery beginning next year. And it will pick up steam over time," he told news programme 60 Minutes. dpa