The US Federal Reserve has said that it will cut its fiscal stimulus programme by another $10 billion as the US economy shows signs of a strong economic revival.

The encouraging data from the US convinced investors that the Federal Reserve will continue its gradual withdrawal of stimulus. There are concerns that the rolling back of fiscal stimulus package will reduce investor demand for risker assets. The Federal Reserve Bank said on 18 December, 2013 that it is planning to reduce its monthly bond purchases in January to $75 billion from $85 billion. The central bank has also said that its benchmark interest rate will remain low for an extended period of time in order to support the economic growth in the world's largest economy.

The central bank of the world's largest economy is aiming to gradually conclude its extraordinary economic stimulus despite remaining concerns over a global economic recovery. Analysts had expected that the US Federal Reserve's decision to start rolling back its stimulus package would affect investor confidence in the market.

Janet Yellen, who is the first woman to head the Federal Reserve, will lead the central bank at a troubling time as it is planning to roll back it stimulus package. The Federal Reserve has already said that it will start rolling back its billion bonds buying programme. Fed Chairman Ben Bernanke will hand over the central bank's command to Yellen on Friday.