Fed ends bond buying

The US Federal Reserve on Wednesday ended its monthly campaign of purchasing asset-backed debt, a show of confidence that the American economy would continue to recover despite bleak forecasts for much of the rest of the world.

But the central bank said it would keep its benchmark short-term interest rates at record lows "for a considerable time" while the job market picks up. Experts do not expect it to raise that rate until mid-2015.

"The Committee continues to see sufficient underlying strength in the broader economy," the Fed's policy committee said in a statement after a regular two-day meeting.

A decision to raise rates again would depend on incoming economic data, the Fed said.

The stopping of the long-running monetary stimulus program, known as quantitative easing, was largely expected. The central bank had already tapered its monthly bond purchases from $85 billion (66.5 billion euros) to $15 billion as the economy gradually recovered from the 2007-2009 recession.

The committee's statement also no longer referred to slack in the labor market as "significant," but instead said that it was "gradually diminishing," underscoring faith that the unemployment rate would continue to fall. In September, that rate fell to a six-year low of 5.9 percent.

But the Fed did acknowledge that some factors, such as lower energy prices, were weighing down inflation and keeping it below the central bank's 2 percent target.

"The Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year," the statement said.

cjc/uhe (Reuters, AP)