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The Fed has announced that it will further reduce its support policy for the US economy. This reduction will take place by reducing the monthly purchase of bonds by 10 billion dollars. This brings the monthly stimulus to 35 billion dollars. It is expected that this support programme will be completely phased out this year.
The Fed also came out with the announcement that interest rates will remain unchanged at 0 to 0.25 percent. It is expected that these interest rates will remain so low for a long time, even after the tapering of the support policy.
U.S. growth is likely to be weaker than expected this year. This is expected to grow by around 2.1 percent. Previous expectations were about 2.9 percent.
