U.S. Federal Reserve cuts stimulus by $10-billion America's monetary policy makers voted to shave their monthly bond-purchase program by an additional $10-billion (U.S.), saying they remain confident the U.S. recovery finally is picking up real momentum. The Fed said Wednesday that it would create $65-billion (U.S.) to buy Treasury debt and mortgage-backed securities in February, compared with $75-billion in January and $85-billion in December. There was a flash of doubt about the economy's strength earlier this month when the Labor Department reported that employers added only 74,000 positions in December, a disappointing result because if followed increases of 200,000 or more in three of the previous four months. But the Federal Reserve's policy committee chose to treat the December data as a blip, allowing Chairman Ben Bernanke to complete his eight-year tenure without causing any waves. Most of the professional Fed watchers on Wall Street predicted the Fed would stay the course it laid out at the end of the 2013 and a surprise could have roiled markets that already are rocky because of worries about emerging markets such as Turkey and Argentina. "Labour markets were mixed, but showed further improvement," the Federal Open Market Committee said in a statement at the end of its two-day meeting. Later in the statement, the committee reiterated that it likely will "reduce the pace of asset purchases in further measured steps at future meetings" as long as growth and inflation unfold as predicted. All ten voting members of the committee supported the decision, including Janet Yellen, who will replace Mr. Bernanke as head of the Fed starting next month. The Fed in December charted a more optimistic course, predicting economic growth of as much as 3.2 per cent this year and as much as 3.4 per cent in 2015. Those would be the fastest growth rates since 2005. Mr. Bernanke last month promised a deliberate return to a more normal world where the U.S. central bank isn't creating tens of billions of dollars every month to stoke economic growth, a policy called quantitative easing, or QE. The Fed has deployed QE three times since the financial crisis struck in 2008, most recently in September 2012. So far under QE3, the Fed has created $1.35-billion dollars to purchase financial assets, putting downward pressure on borrowing costs and spreading private cash by pushing investors into riskier assets. The Fed's policies helped push U.S. stock markets to record levels in 2013. Equities, however, have hit a rough patch lately, as investors fret about signs of strain in some emerging-market countries that had become popular destinations for capital because they offered higher return than could be had in the U.S. while the Fed was aggressively seeking to contain bond yields. Now that the Fed is changing course, investors are redoing their cost-benefit analyses. Many are deciding their money is safer in the U.S., where the economy is showing signs of life, than in places such as Argentina, which is suffering from weaker commodity prices and opaque policy decisions. The result of all this is unease and volatility. The Standard & Poor's 500 Index extended losses after the release of the Fed statement, dropping more than 1 per cent to about 1,771, a level that would be the lowest close since November, according to Bloomberg News. The Dow Jones Industrial Average fell 1.3 per cent to about 15,726. It is telling that troubled financial markets didn't cause the Fed to blink. The apparent calm shown by policy makers shows it will take more than one weak economic indicator and a few days of choppy trading to convince the central bank to change its mind on winding down QE in a deliberate fashion.