The Federal Reserve on Wednesday left its key benchmark lending target, the fed funds rate, unchanged at 0.25% and kept its USD85 billion monthly asset-purchasing program in place.
The Fed said the economy was showing signs of improvement though it still faced enough headwinds to prompt monetary authorities to hold off on tapering its asset purchases, namely fiscal uncertainties that continue to drag on recovery.
Stimulus tools such as asset purchases aim to drive recovery by keeping long-term interest rates lower, weakening the dollar in the process.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.07% at 79.74.
The move came as little surprise to investors, who were expecting the U.S. central bank to leave policy unchanged.
"Economic activity has continued to expand at a moderate pace. Indicators of labor market conditions have shown some further improvement, but the unemployment rate remains elevated," the Fed said in a statement.
"Available data suggest that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months. Fiscal policy is restraining economic growth."
The Fed added inflationary pressures remain in check as well.
"Apart from fluctuations due to changes in energy prices, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable," the statement read.
As in previous meetings, the Federal Reserve said it would continue to monitor data before deciding when to taper the pace of its monthly asset purchase and eventually end the stimulus program, known technically as quantitative easing but widely referred to as printing money out of thin air.
The Fed did not indicate when tapering may begin.
"In judging when to moderate the pace of asset purchases, the Committee will, at its coming meetings, assess whether incoming information continues to support the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective," the statement read.
"Asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's economic outlook as well as its assessment of the likely efficacy and costs of such purchases."
The economy, meanwhile, should continue to recover though the Fed concluded that monetary support will be necessary for now to ensure optimal employment within the context of price stability.
"The Committee expects that, with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall," the Fed said.
"The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term."
Hit-or-miss economic indicator have many expecting the Fed to continue stimulating the economy with monthly asset purchases into 2014, especially in wake of a fiscal impasse in Washington that closed the government for around two weeks and threatened to throw the country into default.
Concerns that uncertainty over the nation's fiscal health will erode consumer and business confidence and water down growth have reflected in economic indicators in recent weeks.
The Fed said the economy was showing signs of improvement though it still faced enough headwinds to prompt monetary authorities to hold off on tapering its asset purchases, namely fiscal uncertainties that continue to drag on recovery.
Stimulus tools such as asset purchases aim to drive recovery by keeping long-term interest rates lower, weakening the dollar in the process.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.07% at 79.74.
The move came as little surprise to investors, who were expecting the U.S. central bank to leave policy unchanged.
"Economic activity has continued to expand at a moderate pace. Indicators of labor market conditions have shown some further improvement, but the unemployment rate remains elevated," the Fed said in a statement.
"Available data suggest that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months. Fiscal policy is restraining economic growth."
The Fed added inflationary pressures remain in check as well.
"Apart from fluctuations due to changes in energy prices, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable," the statement read.
As in previous meetings, the Federal Reserve said it would continue to monitor data before deciding when to taper the pace of its monthly asset purchase and eventually end the stimulus program, known technically as quantitative easing but widely referred to as printing money out of thin air.
The Fed did not indicate when tapering may begin.
"In judging when to moderate the pace of asset purchases, the Committee will, at its coming meetings, assess whether incoming information continues to support the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective," the statement read.
"Asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's economic outlook as well as its assessment of the likely efficacy and costs of such purchases."
The economy, meanwhile, should continue to recover though the Fed concluded that monetary support will be necessary for now to ensure optimal employment within the context of price stability.
"The Committee expects that, with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall," the Fed said.
"The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term."
Hit-or-miss economic indicator have many expecting the Fed to continue stimulating the economy with monthly asset purchases into 2014, especially in wake of a fiscal impasse in Washington that closed the government for around two weeks and threatened to throw the country into default.
Concerns that uncertainty over the nation's fiscal health will erode consumer and business confidence and water down growth have reflected in economic indicators in recent weeks.