Federal Reserve expected to keep tapering

For Federal Reserve officials, it's likely to be steady as she goes when they offer their latest read on the U.S. economy on Wednesday.

The Federal Open Market Committee, which sets monetary policy, is expected to continue unwinding the central bank's monthly bond-buying program when the panel releases its April policy statement following a two-day meeting in Washington. The FOMC started withdrawing this stimulus in December, "tapering" the bond purchases from $85 billion a month to the current level of $55 billion.

"A further tapering in asset purchases of $10 billion/month is almost a foregone conclusion," Goldman Sachs (GS) analysts said in a client note.

The Fed launched the bond purchases in late 2008 during the financial crisis. The policy, known as "quantitative easing," is aimed at boosting growth by keeping longer term interest rates low.

At the March meeting, Yellen said the economy is improving, but noted that "much remains to be done" to accelerate job growth. She reiterated that point at a speech in New York earlier this month, saying that the labor market remains slack.

The federal government tomorrow will also report the rate of GDP for the first three months of the year. Economists think the frigid weather earlier in the year could lower growth for the quarter to as low as 1 percent. But they say that more mild temperatures in recent weeks is supporting a sharp rebound in growth, with research firm Macroeconomic Advisers estimating second-quarter GDP at a robust 3.5 percent.

Stronger growth since its March last policy statement and the fading weather effects could lead the FOMC to modestly upgrade its assessment of the economy, according to Goldman.