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As it said goodbye to the man who led it through eight history-making years, the Federal Reserve did as it was expected Wednesday, voting to reduce the monthly stimulus program by another $10 billion.
Chairman Ben Bernanke led his last Fed meeting as the Open Markets Committee decided to continue unwinding a program that has expanded the U.S. central bank's balance sheet to more than $4 trillion.
The unanimous decision—a rare Fed occurrence—came amid a tumultuous background of emerging market currency tremors and an uncertain though gradually improving future for the U.S. economy. Stocks have been lagging in 2014 after a blockbuster previous year, and some in the market believe adjustments to new Fed policy is part of the reason.
"This is a market righting itself, trying to assess what valuations should be as the Fed begins its policy change," said Quincy Krosby, chief market strategist at Prudential Annuities.
At its December meeting, the Fed decided to decrease the bond buying program—quantitative easing—by $10 billion to $75 billion. Wednesday's decision takes that down another notch and lends credence to a widely held market belief that the Fed will wrap up QE by the end of 2014. The new balance will see purchases of $30 billion a month in mortgage-backed securities and $35 billion in Treasurys.
"It's been obvious for a few months that the Fed wants out," Bill Gross, co-chief investment officer at bond giant Pimco, told CNBC. "What we're seeing is an end of QE in October, early November of this year, and then importantly a focus on the policy going forward."
(Read more: Here's what changed in new Fed statement)
The program began during the financial crisis as a way to backstop the markets with an endless supply of liquidity—a "helicopter" drop, as Bernanke once put it, earning him the nickname "Helicopter Ben." But through the past four-plus year it has become as much a boon to the equity markets as the S&P 500 has gained some 180 percent since the first round of QE.
Stocks had been down sharply prior to the decision being announced shortly after 2 pm and briefly erased some losses before returning to previous negative levels.
"The ball was on the tee and they hit it exactly where they were supposed to," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "It seems like we're comfortable with the tapering and almost looking past it. Now the thing we're worrying about clearly is some of the ongoing issues in the emerging markets."
The Fed also gave further clues about policy, saying the unemployment rate probably would have to decline "well past" the original benchmark of 6.5 percent before the FOMC would consider hiking its zero-bound target interest rate.
However, it felt comfortable enough to begin at least reducing the pace of asset purchases.
"Information received since the Federal Open Market Committee met in December indicates that growth in economic activity picked up in recent quarters," the Fed said in its statement.
The committee also took another step forward on establishing a schedule for purchases that would unwind QE completely by the end of the year.
"If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings," the statement said.
"However, asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases."
—By CNBC's Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.