Update | US federal reserve cuts bond-buying but stresses easy policy
The U.S. Federal Reserve announced plans to trim its aggressive bond-buying program but sought to temper the long-awaited move by suggesting its key interest rate would stay lower for even longer than previously promised.
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In what amounts to the beginning of the end of its unprecedented support for the U.S. economy, the central bank said it would reduce its monthly asset purchases by $10 billion to total $75 billion. It trimmed equally from mortgage and Treasury bonds.
"The (policy-setting) committee sees the risks to the outlook for the economy and the labor market as having become more nearly balanced," the Fed said after a two-day meeting.
The move, which surprised some investors, was a nod to better prospects for the economy and labor market and marks a historic turning point for the largest monetary policy experiment ever.
U.S. stocks initially dropped, but quickly moved back into positive territory. Similarly, bond prices slid but then bounced back. The dollar rose against the euro and the yen.