And adds, "This may well be the same conclusion that Yellen articulates in the press briefing this week, which on its own shouldn't prompt any major re-pricing of Fed policy expectations".
United States bond yields rose, pushing up the USA dollar after the Fed's decision, but U.S. benchmark stock indexes were little changed.
Mark Zandi, chief economist at Moody's Analytics, told AFP the Fed should raise rates, because inflation is inevitable given steady growth and falling unemployment.More news: Michael O'Leary: If Ryanair pilots misbehave there will be no 'goodies'
The dollar's gains come after a run of losses in recent months as tepid inflation and a lack of movement on Donald Trump's economic agenda in Congress had seen investors bet on no more rate hikes this year.
The yield on Germany's 10-year government, the benchmark for the region, was 4 basis points higher in early trade at 0.48 percent, its highest since early August. They rose over 1.5 percent as a weaker euro helped the pan-European STOXX 600 generally too.
"The labor market has continued to strengthen and. economic activity has been rising moderately so far this year", the central bank said in its statement. The FOMC repeated language saying "near-term risks to the economic outlook appear roughly balanced". Buying securities in order to feed money into the economy and influence short-term interest rates is common practice.
Markets have priced in a near-zero chance that the Fed will change interest rates.More news: Happy Navratri! About the significance of the nine-day festival
The Federal Open Market Committee, which sets monetary policy, also will release the latest quarterly forecasts by voting and non-voting committee members on the economy and the path of interest rates over the near- and longer-term. The reduction in assets will be slow - just US$10 billion a month to start. It now holds approximately $4.2 trillion in Treasury bonds and mortgage-backed securities dating back to the 2007-09 financial crisis.
Minutes from the July meeting showed deepening worries about a prolonged period of low inflation.
The central bank also downplayed the impact of Hurricanes Harvey and Irma on the economy, saying that they "are unlikely to materially alter the course of the national economy over the medium term", other than temporarily lifting inflation because of higher prices for gas and other goods for which the supply chain was disrupted. What's more, its investments to maintain the current size of its USA debt holdings financed roughly 40 percent of America's budget deficit previous year.
Alongside pulling the trigger on the unwinding of quantitative easing, the Fed kept interest rates on hold, but the tone of its announcement prompted investors to price in a higher likelihood of a December rate rise.More news: Gareth Bale strikes in vital Real Madrid victory
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