Fed Tapers, Drops Unemployment Target

(RTTNews) - The Federal Reserve on Wednesday trimmed another $10 billion from its monthly asset-purchase program, lowering the monthly bond buys to $55 billion.

The central bank altered its forward guidance on interest rates, dropping its 6.5 percent unemployment target in favor of a broader range of indicators.

The vote in favor of this policy action was 8-1, as Minneapolis Fed chief Narayana Kocherlakota dissented.

The decision followed the first meeting led by new Fed Chairman Janet Yellen, who will explain the Fed's rationale at a press conference starting at 2:30 pm ET.

In a statement accompanying the decision, the Fed reiterated its promise to keep interest rates exceedingly low for the foreseeable future. 13 of 16 members do not expect the first rate hike until 2015, reflecting a somewhat dimmer view of the U.S. economic recovery.

Fed members now project the economy will grow no faster than 3.0 percent this year instead of 3.2 percent under its December forecast, due in part to a winter lull brought on by unusually cold weather.

"Information received since the Federal Open Market Committee met in January indicates that growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions," the statement read.

The FOMC "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."