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Federal Reserve Pledges to Keep Interest Rates Near Zero

Fed tapers by $5 billion 2:57

The Federal Reserve renewed a pledge to keep interest rates near zero for a "considerable time" and repeated concerns over slack in the labor market, standing firm against calls to overhaul its policy statement. Many economists and traders had expected the central bank to alter the rate guidance it has provided since March, given generally improving data on the economy's performance. But the Fed repeated its assurance that rates would stay ultra-low for a "considerable time" after a bond-buying stimulus program wraps up. In a statement on Wednesday after a two-day meeting, it announced a further $10 billion reduction in its monthly purchases, leaving the program on course to be shuttered next month.The policy-setting Federal Open Market Committee also repeated its assessment that a "significant" amount of slack remains in the labor market, a further sign it is no rush to raise benchmark borrowing costs. "On balance, labor market conditions improved somewhat further; however, the unemployment rate is little changed ..." the FOMC said in its statement.

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- Reuters