Wall Street advanced as US Federal Reserve policy makers kept its US$85 billion a month bond-buying program intact as the economy continues to recover at a pace that requires ongoing stimulus.
"The Committee sees the downside risks to the outlook for the economy and the labour market as having diminished since the fall," policy makers said in a statement at the end of a two-day meeting while at the same time assessing economic activity as "modest" through the first-half of the year. The Fed earlier characterised the recovery as "moderate".
"The Committee recognises that inflation persistently below its 2 per cent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term," the Fed said.
The FOMC said it decided to continue purchasing additional agency mortgage-backed securities at a pace of US$40 billion per month and longer-term Treasury securities at a pace of US$45 billion per month. It didn't indicate when it might adjust its pace of purchases.
"This is pretty much what the market wanted. The Fed will maintain its asset purchases until it sees labour market improvement, and it will maintain an accommodative policy after the purchases end," Wayne Kaufman, chief market analyst at Rockwell Securities in New York, told Reuters.
