Fed seen on taper track as Bernanke bows out

WASHINGTON, Jan 28 (AFP) : The Federal Reserve is expected to keep on the stimulus tapering track Wednesday, with most analysts predicting another "modest" $10 billion cut in monthly asset purchases.

Fed Chairman Ben Bernanke heads up the final monetary policy meeting of his eight-year tenure at the helm of the US central bank with Janet Yellen, his close policy ally and current vice chair, due to succeed him on February 1.

The two-day meeting of the Federal Open Market Committee that opens Tuesday comes amid signs of underlying momentum in the US economy, despite a dismal December jobs report that raised concerns about the outlook.

The last time the FOMC met, most policy makers were confident that the labor market would continue to improve even if they began to reduce The Fed's massive monetary stimulus, according to the minutes of the December 17-18 meeting.

The FOMC voted then 9-1 to "modestly reduce" asset purchases by $10 billion to $75 billion a month, beginning January. The Fed said it would continue to monitor economic and financial conditions in gauging the pace of its taper.

The central bank assured that its "sizable and still-increasing holdings" should keep downward pressure on longer-term interest rates and, in turn, promote a stronger economic recovery.

Recent data including the central bank's upbeat Beige Book survey show the US economy grew at a "moderate" pace across most regions at the end of 2013.