The Federal Reserve reduced its forecast for economic growth this year on Wednesday, but gave the recovery a vote of confidence by further cutting the stimulus program it has had in place since the recession.
The Fed said it expects the economy to expand at a pace between 2.1 percent and 2.3 percent in 2014, down from its previous forecast of around 2.9 percent. The economy slowed considerably in the first quarter, although many economists expect growth to pick up later in the year.
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The Fed committee that sets interest rate policy voted to reduce its monthly bond-buying program by $10 billion to $35 billion a month, less than half of what it was last year. It held interest rates unchanged near zero.
"Information received since the Federal Open Market Committee met in April indicates that growth in economic activity has rebounded in recent months," the Fed said in a statement. It said that the labor market showed further improvement and household spending rose moderately. Fiscal policy continued to hold back growth, it said, but that obstacle to the recovery was shrinking.