The Federal Reserve Board on Wednesday neared the halfway mark of unwinding its unprecedented bond buying program, reducing its purchases to $45 billion.

With the labor market and economy showing signs of improvement, policymakers agreed to continue to reduce the pace of its monthly purchases of mortgage and Treasury bonds by an additional $10 billion following a two-day Federal Open Market Committee.

"In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the committee decided to make a further measured reduction in the pace of its asset purchases," the FOMC said in its policy statement.

It is the fourth time that policymakers agreed to reduce the bond buying program while keeping rates steady. FOMC participants cited further improvement in the labor market, but still noted that the housing sector remained slow even while families appeared to be spending more.

Starting in May, the Fed will now begin buying $20 billion and $25 billion of mortgage-backed securities and longer-term Treasury securities, respectively.

Policymakers also reiterated that a wide range of factors would contribute to its decision to lift the federal funds rate, including labor market conditions, inflation expectations and other financial developments. But until then, they viewed it as "appropriate" to continue to maintain near zero interest rates for a "considerable time" after the asset purchase program winds down.

Fed Chair Janet Yellen is responsible for overseeing how the central bank will continue to pull back its stimulus, which has ballooned the Fed's balance sheet to $4 trillion, while also keeping an eye on inflation.

Former Fed Chairman Ben Bernanke established the unprecedented program as an additional tool to help the U.S. economy recover from the worst recession since the Depression. Policymakers had already exhausted their ability to reduce the federal funds rate any further, turning to long-term asset purchases as another way to aid the recovery. The benchmark rate has sat at a range of zero to 0.25% since December 2008.

In December, the Fed took an inaugural step to reduce its controversial quantitative easing program to $75 billion, cutting $5 billion each from its mortgage bonds and Treasury securities purchases. The central bank has continued to reduce its bond buying program by $10 billion at each meeting.

Policymakers reiterated once again that asset purchases were "not on a preset course." They added that any decision to maintain the pace of their stimulus program would be based on the outlook of the labor market and inflation, as well as the efficacy and costs of such purchases.

"If incoming information broadly supports the committee's expectation of ongoing labor market conditions and inflation moving back toward its longer-run objective, the committee will likely reduce the pace of asset purchases in further measured steps at future meetings," the FOMC said in its policy statement.

After revising their forward guidance at their last March meeting, an instrument central bankers have used to provide additional details to the market on the timing of their decision to lift interest rates, policymakers agreed this time not to make any additional changes.

Following last month's FOMC meeting, Yellen suggested that the Fed could begin to lift interest rates roughly six months after the central bank winds down its bond buying program this fall. At the time, however, she also carefully said that any rate hike would be dependent on current economic conditions.

"We need to see where the labor market is, how close are we to our full employment goal," said Yellen, at the March 19 press conference. "This will be a complicated assessment not just based on a single statistic. And how rapidly are we moving toward it? Are we really close and moving fast? Or are we getting closer, but moving slowly?"

Yellen and other Fed officials have since downplayed expectations of lifting the benchmark rate by pointing to the necessity of remaining flexible in light of shifts in the economy.

"While monetary policy discussions naturally begin with a baseline outlook, the path of the economy is uncertain, and effective policy must respond to significant unexpected twists and turns the economy may take," said Yellen, in an April 16 speech.

Wednesday's decision was supported by every member of the FOMC.

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