The US Federal Reserve will undertake a "light" version of quantitative easing being carried out by Britain, in the face of slowing rates of economic recovery by cautiously directing liquidity into the financial system, reports the Guardian.

The Fed's open market committee said it anticipates a gradual return to higher levels of resource utilisation in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.

The central bank's policymaking committee has left low interest rates untouched between 0 and 0.25 per cent. In addition, the Fed intends to provide stimulus to economic activity by reinvesting the profits from its maturing holdings of mortgage-backed securities into Treasury bonds.

The decision has resonated well with Wall Street, with the Dow Jones industrial average - which had fallen by around 100 points during the committee's morning session - bouncing back moments after the statement was announced.