What you must know about the Fed's tapering no-show

On the prowl for further economic progress.

According to CIMB, contrary to market expectations of a tapering announcement, the Fed has decided to keep its asset-purchase programme unchanged after the conclusion of a two-day meeting. 

The Fed decided to await more evidence that economic progress will be sustained before adjusting the pace of its purchases.

Here's more from CIMB:

Although this move provides some temporary respite for the market, it will cause prolonged market uncertainty as investors recalibrate expectations towards a tapering announcement during the next two FOMC meetings on 29-30 Oct and 17-18 Dec.

Adding to the uncertainty are the upcoming budget and debt-ceiling battles in Oct and the Fed chair selection process.

The Fed sees continued moderate economic growth amid some improvement in the labour market. Household spending and business fixed investment advanced, while the housing sector has been strengthening.

Nevertheless, the Fed downgraded this year's GDP growth estimate to 2.0-2.3% from 2.3-2.6%. Its unemployment rate projection was roughly maintained at 7.1-7.3%. For 2014, the Fed also revised down its GDP growth to 2.9-3.1% (3.0-3.5% previously), while unemployment will be at 6.4-6.8% (6.5-6.8% previously).