The Federal Reserve refrained from increasing its $1.75 trillion bondpurchase program, said the pace of economic contraction is slowing and predicted inflation will remain "subdued for some time." FOMC also kept the benchmark interest rate between zero and 0.25 percent. The rate will stay at "exceptionally low levels" for an "extended period."

The central bank added that it "is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted."

"The challenge for us on the Federal Open Market Committee will be to shrink our balance sheet and tighten policy soon enough when the recovery emerges to prevent rising inflation," Orders for durable goods unexpectedly rose in May, a government report showed, while unemployment continues to climb.

Billionaire investor Warren Buffett said the U. S. may need a second economic stimulus package as unemployment is poised to continue rising. "We're going to have more unemployment. The recovery really hasn't got going." The economic rebound "will be a slow process," said Buffett, who predicted the joblessness rate will exceed
10 percent. The economy "hasn't turned yet. There's no telling how long it will take. It will happen."

The Organization for Economic Cooperation and Development raised its forecast for the economy of its 30 member nations for the first time in two years as the U. S. slump shows signs of easing.

The combined economy of the world's most? industrialized countries will shrink 4.1 percent this year and grow 0.7 percent in 2010. The new projections compare with March forecasts for contractions of 4.3 percent and 0.1 percent. Two days back The World Bank said the recession will be deeper than previously forecast.

The European Central Bank said it will lend banks 442 billion euros ($621 billion) for 12 months, the most it has ever allotted in an auction, as it steps up efforts to unblock credit markets in the 16? nation euro region. The loans "should help reduce one? year market rates and six? month market rates,"Asian stocks rose, led by mining and technology companies, after metals prices gained and orders for U. S. durable goods unexpectedly increased.