Fed unveils further cut in bond purchase program

The US Federal Reserve announced on Wednesday that it will not pause the bond buying program, as there is sufficient underlying strength in the broader economy for it to keep taper on course.

The Federal Open Market Committee (FOMC) decided to continue trimming the monthly bond buying by 10 billion U.S. dollars to 55 billion dollars since April, a similar pace with that in the past two months, according to a statement released after the two-day FOMC meeting ended on Wednesday.

Since January, growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions, read the statement, which indicated soft data on retail sales, home construction and job creation.

"Labor market indicators were mixed but on balance showed further improvement. The unemployment rate, however, remains elevated." it said.

The Committee expected, with appropriate policy accommodation, economic activity will expand at a moderate pace and labor market conditions will continue to improve gradually.

Fed reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate, especially if projected inflation continues to run below the Committee's 2 percent longer- run goal, and provided that longer-term inflation expectations remain well anchored.

However, it dropped jobless rate threshold for tightening policy, and said 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.