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    US Central Bank Trims Its Support of American Economy

    Policy makers at the U.S. central bank are again trimming their direct support of the world's largest economy.

    The Federal Reserve said Wednesday it will buy $65 billion worth of securities in February to pump more money into the economy, boost job growth and keep interest rates low. But that asset purchase would be $10 billion less than this month, and would keep the central bank on course to wind down the program altogether by the end of the year, if the U.S. economy continues to advance.

    In a statement after a two-day meeting in Washington, the Fed said it sees economic activity picking up, "with growing underlying strength in the broader economy."

    The bank said it is keeping its benchmark interest rate near zero, and likely will continue to keep it that low "well past the time" that the country's unemployment rate reaches 6.5 percent. The jobless rate now is at 6.7 percent, a five-year low.



    The central bank cut the asset purchases at the last policy meeting headed by outgoing chairman Ben Bernanke, as his eight-year tenure expires. Fed vice chair Janet Yellen will become the first woman to head the century-old agency on Saturday.

    For more than a year, the central bank bought $85 billion worth of securities every month to pump money into the American economy as it steadily, but unevenly, recovered from the 2008 recession.

    The Fed's cutback in its direct support for the U.S. economy has roiled markets and currencies in emerging economies throughout January. Growth had advanced in the emerging economies during the depths of the world downturn.

    But now, investors fear that as the Fed eases off its securities purchases, and long-term interest rates edge higher in the U.S., billions of dollars of investment money will be pulled from the emerging economies. Instead, the money could be invested in the U.S. and other advanced economies for bigger returns.

    One barometer Fed policy makers watch is the U.S. jobless rate. Even though the figure has fallen over the last year, the Fed noted that "labor market indicators were mixed" in recent months, even as they generally improved.

    Much of the decline in the unemployment rate has been the result of discouraged long-term unemployed workers ending their search for new jobs, and thus not counted in the jobless figure. U.S. employers had been adding about 200,000 new jobs a month through the latter half of 2013, but just 74,000 in December.

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