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New York - The Federal Reserve, as expected, dampened expectations for interest rate hikes this year, while holding steady on its plans for asset purchases.

The US central bank decided to hold its target for the federal funds rate, the rate banks charge each other for overnight loans, in the zero to 0.25 percent range reached in December.

That means commercial banks' prime lending rate, used to peg rates on home equity loans, certain credit cards and other consumer loans, will stay around 3.25 percent, the lowest in decades.

The Fed also decided not to ramp up asset purchases above an existing promise to buy $300 billion of longer-dated U.S. government bonds and $1.45 trillion of mortgage debt.

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