The Federal Reserve kept key interest rates unchanged on Wednesday and said it expected to begin cutting its huge holdings of bonds at a relatively recent time in a sign of confidence in the US economy.
The US central bank kept its benchmark lending rate unchanged at a range of 1.00 percent to 1.25 percent and said it was continuing its slow pace of tightening monetary policy, which has raised the interest rate by one percentage point since 2015.
In his statement after a two-day meeting of the Monetary Policy Committee, the Fed noted that the world's largest economy is growing at a moderate pace and employment gains are strong. But he also noted that inflation in general and an index of core prices had fallen and said he would carefully monitor price trends.
The commission expects to start implementing its program to normalize the balance sheet relatively soon, the central bank said, adding it would follow a plan drawn up in June.
After pushing interest rates close to zero to counter the financial crisis of 2007-2009 and the recession, the central bank pumped more than $ 3 trillion into the economy through bond purchases, pushing interest rates further down.
The Federal Reserve's balance sheet grew to $ 4.5 trillion.
A cut in the balance sheet would mark the end of a controversial tool that drew criticism from Republican members of Congress.
While the Reserve Bank researchers concluded that bond purchases had only modestly contributed to the economy, Federal Reserve Chairman Janet Yellen said the central bank may resort to buying assets again if the economy falls into a severe recession.
The decision to keep interest rates unchanged by the Federal Reserve on Wednesday was approved by all US central monetary policy makers.
