WASHINGTON (4/30/14 UPDATED 2:28 ET)--The Federal Open Market Committee (FOMC) stayed the course this month, announcing today in statement that it would continue cutting back its asset purchase program, a key maneuver the Fed has relied upon to stimulate the economy since it fell flat in 2008.
The FOMC, which is the monetary policy-making body of the Federal Reserve, convened over the past two days for the third of its eight meetings scheduled for 2014.
As expected, the Fed chopped the amount it will purchase in bonds and securities--injecting cash into the lending market and subsequently into the pockets of people who will spend it--down to $45 billion, spreading the taper evenly between Treasury and mortgage-backed securities at $5 billion less each.
Economic activity had grown recently, with improvements seen in the labor market and household spending, the committee said.
Despite a still-elevated unemployment rate, weak inflation, declining business fixed investment and a slowing housing sector, the committee still saw it fit to pull back on its asset-purchase program.
"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 statement said.
Moving forward, the committee expects to continue to taper quantitative easing, but cautioned that asset purchases are not on a preset course. The committee's decisions about their pace, the committee said, will hinge on the outlook of the labor market, on inflation and on assessments of how effective the program has been.
Further, the Fed announced that they will continue to keep the federal interest rate near 0% in order to foster more activity in the housing and lending markets.
"It likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends," the statement said, "especially if projected inflation continues to run below the committee's 2% longer-run goal."