WASHINGTON (AP) — In a surprise, the Federal Reserve has decided against reducing its stimulus for the U.S. economy because its outlook for growth has dimmed in the past three months.
The Fed said it will continue to buy $85 billion a month in bonds while it awaits conclusive evidence that the economy is strengthening. The Fed's bond purchases are intended to keep long-term borrowing rates low to boost spending and economic growth.
"Conditions in the job market today are still far from what all of us would like to see," Chairman Ben Bernanke said at a news conference shortly after the statement was released.
Stocks spiked after the Fed released the statement at the end of its two-day policy meeting. The Standard & Poor's 500 index and Dow Jones industrial average jumped to record highs. The Dow was up more than 100 points shortly after the statement was released.
In the statement, the Fed said that the economy is growing moderately and that some indicators of the job market have improved. But it noted that rising mortgage rates and government spending cuts are restraining growth.
