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Fed to reduce pace of bond buying by another $10B

WASHINGTON (AP) - The Federal Reserve says it will cut its monthly bond purchases by an additional $10 billion to $65 billion because of a strengthening U.S. economy. It's doing so even though the prospect of reduced Fed stimulus and higher U.S. interest rates has rattled global markets.

The Fed also reaffirmed its plan to keep short-term rates at record lows in a statement issued after Ben Bernanke's final policy meeting. Bernanke will step down Friday after eight years as chairman.

Many investors fear that reduced Fed bond buying will boost U.S. rates and cause investors to move money out of emerging markets and into the United States for higher returns. Currency values in emerging nations have fallen. India, Turkey and South Africa have raised rates to try to protect their currencies.