(Reuters) – The U.S. Federal Reserve on Wednesday renewed a pledge to keep interest rates near zero for a “considerable time” but it issued projections that suggested it may raise borrowing costs a bit quicker than it had been thinking a few months ago. Many economists and TRADERS had expected the central bank to alter the rate guidance it has provided since March, given generally improving data on the economy’s performance.
But the Fed repeated its assurance that rates would stay ultra-low for a “considerable time” after a bond-buying stimulus program wraps up. In a statement after a two-day meeting, it announced a further $10 billion reduction in its monthly purchases, leaving the program on course to be SHUTTERED next month. “While the much analyzed phrase ‘considerable time’ remained in the FOMC statement, the newly announced scheme for interest rate normalization shows that higher rates are in the cards,” said John Kilduff, a partner at Again Capital LLC in NEW YORK. The policy-setting Federal Open MARKET Committee also repeated its assessment that a “significant” amount of slack remains in the US. labor market, a further sign it is no rush to raise benchmark borrowing costs