Fed shows faith in U.S. economy with bond-buying reduction

The Federal Reserve on Wednesday looked past a dismal reading on first quarter U.S. growth and gave a mostly upbeat assessment of the economy's prospects as it announced another cut in its massive bond-buying stimulus. The Fed said it would reduce its monthly bond purchases to $45 billion from $55 billion, a widely expected decision that keeps it on track to end the program as soon as October. Just hours before the statement was released, the government reported that the economy grew at only a 0.1 percent annual rate in the first quarter, but the Fed pinned its hopes on other recent data that has suggested activity is bouncing back. "What the Fed is saying is ignore this first quarter number, it's not reflective of the underlying strength in the economy," said Phil Orlando, chief equity market strategist at Federated Investors in New York.

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