Fed says economy too weak to begin taper

By a vote of 9 to 1, the Fed decided to maintain the pace of its $85 billion-per-month asset purchase plan. After initial zigs and zags, U.S. stocks dropped, with the Dow Jones Industrial Average DJIA -0.39%  down 78 points in afternoon trade.

Scott Anderson, chief economist at Bank of the West, said the market seemed disappointed by the lack of clarity from the central bank.

Indeed, the central bankers made very few changes to their outlook. Fed officials repeated what they had said in September — that the economy was improving at a “moderate” pace.

The Fed kept its optimistic tone that the economy remains on the mend, just at a slower than expected pace.

“Taking into account the extent of federal fiscal retrenchment over the past year, the [Fed] sees the improvement in economic activity and labor market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy,” the central bank said in a statement. “However, the committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases,” the Fed said. The Fed noted that the housing sector had “slowed somewhat” and it reiterated that fiscal policy is restraining the economy.

Read More: www.marketwatch.com/story/fed-says-economy-too-weak-to-begin-taper-2013-10-30