The Federal Reserve on Wednesday left its benchmark interest rate, the fed funds target rate, unchanged at 0.00%-0.25% and trimmed $10 billion from its $65 billion monthly asset-purchasing program in place to spur recovery.
The Fed is now purchasing $55 billion in Treasury holdings and mortgage debt a month to help make broader financial conditions more accommodative to strengthen recovery.
The Fed''s statement omitted previous language calling for considerations for hike rates if the unemployment rate approaches a 6.5% threshold, a policy tool known as forward guidance.
Even though the economy is improving, a highly accommodative monetary policy stance remains appropriate, the U.S. central bank said.
Fed officials said labor-market indicators were mixed but improving, though the unemployment rate remains elevated.
Still, recovery remains healthy enough to throttle back on stimulus tool such as monthly asset purchases but weak enough to do away from rate-hike thresholds.
"The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run," the Fed said in a statement at the end of its March policy meeting, the first under Chair Janet Yellen.
"With the unemployment rate nearing 6-1/2 percent, the Committee has updated its forward guidance. The change in the Committee''s guidance does not indicate any change in the Committee''s policy intentions as set forth in its recent statements."
The U.S. unemployment rate hit 6.7% in February.
Overall, the economy continues to improve and warrants less Fed stimulus, though inflation rates are still running below the U.S. central bank''s 2% target.
"Household spending and business fixed investment continued to advance, while the recovery in the housing sector remained slow," the statement read.
"Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has been running below the Committee''s longer-run objective, but longer-term inflation expectations have remained stable."
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