The Federal Reserve will taper its quantitative easing by another $10 billion to $55 billion a month because it thinks the economy is strong enough to support higher employment, it said Wednesday.
It also said it would continue to keep short-term rates low to help bolster the economy but did not specify at what rate it might eventually raise rates, as it has done in the past.
The Fed's previous statement had said it planned to keep short-term rates at record lows "well past" the time unemployment fell below 6.5 percent. The rate is now 6.7 percent.
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More than five years ago, the Fed cut its benchmark short-term rate to near zero. It said it will monitor "a wide range of information" on the job market, inflation and the economy before approving any rate increase.
The central bank announced its policies in a statement after the first meeting chaired by Janet Yellen, who succeeded Ben Bernanke after he stepped down last month after eight years as Fed chairman.
The Fed also updated its economic forecasts Wednesday. It expects the economy to grow at a steady if modest pace in 2014 despite weather-related setbacks this winter. The central bank is forecasting growth of 2.8 percent to 3 percent this year, a bit lower than its December projection of between 2.8 percent and 3.2 percent.
The forecast indicates the Fed will continue to pare its monthly bond-buying program.
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