The Federal Reserve on Wednesday looked past a dismal reading on first quarter U.S. growth and gave a mostly upbeat assessment of the economy's prospects as it announced another cut in its bond-buying stimulus.
Hours before the Fed statement was released, the government reported that the economy grew at only a 0.1 percent annual rate in the first quarter, but the Fed pinned its hopes on other recent data that has suggested activity is bouncing back.
The Fed said it would reduce its monthly bond purchases to $45 billion from $55 billion, a widely expected decision that keeps it on track to end the program as soon as October. The Fed has reduced its monthly bond purchases by a cumulative $40 billion in four steady steps.
But Janet Yellen's second meeting as Fed chair offered no specific new guidance on interest rates or other core questions the Fed must answer in coming months. The Fed's policy panel said in its statement that it will keep the overnight target rate between 0 and 0.25 percent "for a considerable time" after the bond buying ends -- the same formulation it used after its March meeting.
Analysts expect the Fed is entering what may prove to be a holding pattern as it closes out the bond purchases and debates when an initial interest rate increase may be warranted. Investors currently expect the first rate rise around the middle of 2015.