The US Federal Reserve has decided to take a “soft landing” on its asset purchases program, leaving its central bank with more cash to spend as it looks to stimulate the economy.
The decision to delay the program was announced on Wednesday by Federal Reserve chair Janet Yellen.
The decision came after US bond yields dropped by more than 5 basis points to 3.7 per cent on Wednesday, after a year-earlier fall.
The Fed has kept its bond purchases program on hold to avoid creating a financial panic that could have led to a “run on” the US government and economy.
Yellen also said the Fed would use the program to support “growth and employment” in the US.
“The program remains active, but it remains important for policymakers to consider the impact of any additional tightening on the economy, the outlook for the labor market, and the outlook in our policy response,” she said.
“This may necessitate additional policy easing and/or monetary policy actions.”
The Fed announced in July that it was suspending asset purchases.
Yellin said that the program would be “relatively unchanged” and the Fed has “no intention of increasing the rate of interest”.
Yellen said the Federal Reserve will continue to spend money to support the economy but said the money would not be a stimulus.
The US economy is now expected to grow at an annual rate of 4.7pc in the first quarter of next year, down from 6.9pc a year ago.