FOMC Decision: Economy Too Weak To Begin Tapering QE

"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 has been holding short-term interest rates at zero since December 2008. Since September 2012, the Fed has been buying bonds hoping to drive down long-term rates and spur growth.

In May, Fed Chairman Ben Bernanke said that the central bank may be able to begin to reduce, or taper, the bond-buying program this year. But since the chairman mentioned tapering, the job market has been sluggish and inflation has remained well below the central bank's 2% target.

"In judging when to moderate the pace of asset purchases, the [Fed] will, at its coming meetings, assess whether incoming information continues to support the committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective," the Fed statement said.

Attention will now turn to Nov. 14, when Fed Vice Chair Janet Yellen, President Barack Obama's nominee to replace Bernanke as Fed chief, could go before the Senate Banking Committee for her nomination hearing.