WASHINGTON - The Federal Reserve is seeking to clarify when it might start to raise short-term interest rates from record lows.
The Fed also says it will cut its monthly long-term bond purchases by another $10 billion to $55 billion because it thinks the economy is strong enough to support further improvements in the job market.
The Federal Open Market Committee, the central bank's policy-setting panel, said in a statement that "there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions," while noting that adverse weather conditions had slowed economic growth this year.
But "in light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the committee decided to make a further measured reduction in the pace of its asset purchases," the FOMC said.
The Fed is reaffirming its plan to keep short-term rates low to help support the economy. But it no longer mentions a specific unemployment rate that might lead it eventually to raise short-term rates. The Fed says instead it will monitor "a wide range of information" on the job market, inflation and the economy before approving any rate increase.
It announced the policies in a statement after its first meeting with Janet Yellen as chair.