US Fed leaves interest rates unchanged, acknowledges economy is 'strong

The Federal Reserve held interest rates steady on Wednesday but left the door open to a further increase in borrowing costs in a policy statement that acknowledged the US economy's surprising strength but also nodded to the tighter financial conditions faced by businesses and households.

"Economic activity expanded at a strong pace in the third quarter," the U.S. central bank said in a policy statement after a two-day meeting in which officials unanimously agreed to leave the benchmark overnight interest rate in the 5.25%-5.50% range where it has been since July.

The language marked an upgrade to the "solid pace" of activity the Fed saw as of its September meeting, and followed on recent data that showed U.S. gross domestic product grew at a 4.9% annual rate in the third quarter.

Though markets think the Fed may be done raising its policy rate, with financial conditions tightening on their own through higher market-based interest rates, data pointing to a stronger-than-expected economy and labor market have kept the prospect of another hike on the table.