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INSTANT VIEW 1-Fed reduces bond buying, still concerned about labor mkts

July 30 (Reuters) - The Federal Reserve on Wednesday pressed ahead with its plan to wind down its bond-buying stimulus and upgraded its assessment of the U.S. economy, while reaffirming it is in no rush to raise interest rates.

STORY: STATEMENT:

KEY POINTS:

* The central bank cut its monthly asset purchases to $25 billion from $35 billion, leaving it on course to shutter the program this fall.

* The Fed reiterated that it would likely keep rates near zero for a "considerable time" after its bond buying ends and restated that an "accommodative" policy was needed.

* The Fed has kept overnight rates near zero since December 2008 and has more than quadrupled its balance sheet to $4.4 trillion through a series of bond purchase programs.

* It cited improving labor market conditions and declining unemployment and acknowledged rising inflation.

COMMENTS:

KIM RUPERT, MANAGING DIRECTOR AT ACTION ECONOMICS IN SAN FRANCISCO:

"There were no real surprises. Trimming of the taper was as expected, and they upgraded their economic outlook. The Fed shows no sign of changing its policy stance anytime soon."

OMER ESINER, CHIEF MARKET STRATEGIST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON:

"Overall, the statement while mixed, did seem to once again overlook some of the key improvements in the economy recently. The fact that officials still see excess slack in the labor markets as noteworthy suggests a high level of comfort with leaving rates very low."

MARKET REACTION:

STOCKS: Indexes pared some losses BONDS: Treasury yields rose as bond prices fell FOREX: The dollar was little changed against the yen and euro

(Americas Economics and Markets Desk; +1-646 223-6300)