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Federal Reserve tapers by another $10 billion

WASHINGTON - The Federal Reserve further slowed its pace of bond buying by $10 billion, but provided no clear signal of timing for its first rate hike.

The central bank also adjusted down its growth forecast for the U.S. economy in 2014 to 2.1 to 2.3 percent. In March the Fed projected 2.8 to 3 percent growth.

Will the Fed spook investors?

In its statement, members of the Federal Open Market Committee generally expressed confidence the economy is improving, but cited some concerns.

"The unemployment rate, though lower, remains elevated. Household spending appears to be rising moderately and business fixed investment resumed its advance, while the recovery in the housing sector remained slow," the statement reads.

The Fed also estimated inflation will be a slight 1.5 percent to 1.7 percent by year's end, near its earlier estimate.

Still, more Fed members than in March expect the central bank's short-term rate to be 1 percent or higher by the end of 2015. That points to the prospect of more members advocating higher interest rates next year. Fed policymakers' average forecast for short-term rates in 2016 also edged up.

Stocks rose following the statement's release and as Fed Chair Janet Yellen began speaking to the press. The Dow Jones industrial average gained 35 points to 16,844 by 2:40 p.m. ET and the S&P 500 rose 8 points to 1950.