THE US central bank has predicted that the nation's job market would continue to improve at a modest pace, and repeated its pledge to keep purchasing securities until the outlook for employment "improves substantially."

As growth in economic activity halted in recent months, mainly due to weather related disruptions (superstorm Sandy) and other transitory factors, and the US economy unexpectedly contracted in the fourth quarter as inventory investment slowed and government spending plunged. The Fed has kept overnight interest rates near zero since late 2008 and it has tripled its balance sheet to about $3 trillion through its purchases of securities, which are aimed at pushing longer-term borrowing costs lower. While the recovery from the 2007-2009 recessions has been persistently moderate, the Fed's policy panel voiced confidence that it would remain on track with continued help from monetary policy.