US Fed slows bond buying with fifth monthly reduction

The statement was nearly identical to the one the Fed issued after its last meeting in April. It reiterated its plan to keep short-term rates low “for a considerable time’’ after it ends its bond purchases, which have been intended to keep long-term loan rates low.

The Fed also downgraded its forecast for US growth for 2014, acknowledging that a harsh winter had caused the economy to shrink in the January-March quarter. It expects growth to be just 2.1 per cent to 2.3 per cent this year, down from 2.8 per cent to 3 per cent in its last projections in March. It thinks inflation will be a slight 1.5 percent to 1.7 percent by year’s end, near its earlier estimate. The reaction in financial markets was muted.

The central bank’s decision to further pare its bond buying means its monthly purchases of long-term bonds will be reduced from $45 billion to $35 billion starting in July. It marked the fifth cut in the purchases since December as the Fed slows the support it’s providing the economy.