The United States central bank is ending a stimulus program known as quantitative easing it started in 2008 during the Global Financial Crisis.
The program involved the US Federal Reserve buying financial assets such as government bonds and mortgage-back securities and creating new money to pay for them.
At its peak, the program pumped $US85-billion a month, or $A97-billion, into the financial system.
The bank says it is confident the economic recovery in the United States will continue, despite a global economic slowdown.
It was an announcement that had been widely anticipated, the United States' central bank putting an end to what became known as quantitative easing, or QE stimulus.
The US Federal Reserve introduced the measure back in 2008 to try to soften the blow of the global economic downturn.
The chief economist at Bank of America Merrill Lynch Australia, Saul Eslake, says the announcement does not mean an end to stimulus measures, though.
Mr Eslake says the Fed will continue to reinvest maturing bonds and mortgage-backed securities so the overall size of its balance sheet remains unchanged.
He says the other thing to note is US interest rates remain at zero and the Fed has indicated they will stay there for now, even if the U-S labour market continues to strengthen.
"The Fed actually has two objectives. Not only do they want to secure maximum sustainable levels of employment, but they also actually want to see the inflation rate in the United States higher than it is at the moment. At the moment, inflation is running at about 1.4 per cent. They want to see it in line with their target, which is two per cent. So they won't be in any hurry to withdraw the stimulus that they're also providing through zero short-term interest rates, even though they are now winding back the stimulus they'd previously been providing through their purchases of bonds and mortgage-backed securities."
Unemployment in the United States has fallen to below 6 per cent, and the Federal Reserve acknowledged the recovery by something it did not say in its latest announcement.
Analysts have pointed out previous policy statements referred to what the bank called "significant under-utilisation of labour resources."
But the latest statement drops the word "significant."
Nuveen Asset Management's Bob Doll has told CNBC it amounts to the central bank recognising fewer Americans are out of work.
"I am particulary interested in what they said about the labour market. It's pretty clear if you talk to CEOs, they're having increasing trouble finding good skilled workers, and so we're going to get some wage-rate increases in that part of the world."
US shares were down before the Federal Reserve's announcement and continued to drop as the market digested the news.
Saul Eslake says the immediate impact on the Australian economy will be downward pressure on the Australian dollar.
"The net result, as interpreted by the financial markets, has been to push up the US dollar. That, in turn, should exert some additional downward pressure on the Australian dollar. And the Reserve Bank, which wants to see the Australian dollar move lower, will be very pleased with that, to the extent that it happens."
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