The Federal Reserve's Open Market Committee on Wednesday did what nearly every analyst predicted by leaving its two key benchmark interest rates unchanged while it talked a little tougher on inflation.

In a nearly unanimous vote (9-1), the FOMC decided to keep the federal funds rate, the interest charged by banks of one another for short term loans, at 2% and its discount rate, the interest charged by the Fed on money it loans to banks and now investment houses, at 2.25%. Investors and analysts alike expected the decision and had priced it into trading on Wall Street from the opening bell, with stocks holding onto gains made earlier in the day but not advancing on the Fed news.

The FOMC statement did not telegraph rate increases to come, as some had feared. It did, however, note that "in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high."

The Fed committee echoed recent comments from Fed Chairman Ben Bernanke that the U.S. economy is still growing, albeit slowly, and should be able to continue to do so.

"Recent information indicates that overall economic activity continues to expand, partly reflecting some firming in household spending," the FOMC said in its statement. "Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters," it continued, concluding, "Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased."

The lone dissenting vote was cast by Richard W. Fisher, an inflation hawk, who wanted an increase in the federal funds rate.

The Fed vote came a day after the most widely watched measure of consumer sentiment, the Conference Board's Consumer Confidence Index, reported near record lows and an all-time low for confidence in the future. That cast some doubt on the ability of the economy to sustain the "some firming in household spending" the FOMC noted in its statement.