Fed tapers another $10 billion

Andrew Harrer | Bloomberg | Getty Images Janet Yellen, chair of the U.S. Federal Reserve.

Andrew Harrer | Bloomberg | Getty Images
Janet Yellen, chair of the U.S. Federal Reserve.

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At its first meeting under new Chair Janet Yellen, the Federal Reserve agreed to dial down its stimulus package another notch, and changed its view on when interest rates will rise.

In moves widely anticipated by financial markets, the Fed Open Market Committee voted to reduce the pace of its monthly asset purchase program by $10 billion to $55 billion.

Also, the FOMC amended language that previously indicated the U.S. central bank’s key policymaking body would begin to consider raising interest rates once the national unemployment rate hit 6.5 percent. The new change gives the Fed leeway in deciding when to hike rates regardless of where the jobless number, currently at 6.7 percent, gyrates.

The moves mark the first key decisions from the Fed since the ascent of Yellen, formerly the vice chair and head of the Fed’s San Francisco branch. She takes over for Ben Bernanke, whose eight years at the helm marked a historically easy approach to monetary policy that has seen the central bank balance sheet balloon past $4.2 trillion.

Taken together, the decisions are indicative that the Fed will maintain its dovish approach
Market expectations were for the Federal Open Market Committee to reduce the pace of its monthly asset purchases by another $10 billion to $55 billion.

—By CNBC’s Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.

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