The US Federal Reserve says it is ready to provide additional support to boost the country's modest economic recovery, suggesting it may be preparing to do more to keep unemployment from rising and prices from falling.
The US central bank made no shift in policy at the end of a one-day meeting, although it expressed somewhat greater concern about the sluggish pace of economic growth and uncomfortably low inflation than it had when it last met in August.
'The committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,' the Fed said in a statement.
After cutting its main interest rate to near zero in December 2008, the Fed launched an asset-buying programme in a further effort to lower borrowing costs and help the economy.
In the end it bought $1.7 trillion in longer-term US government debt and mortgage-related bonds.
The painful US recession ended in June 2009, but the recovery has lost momentum this year with growth tapering to a weak 1.6% annualised rate in the second quarter. Other economic data over the summer also proved surprisingly weak, prompting analysts to cut their growth forecasts for the second half of the year.
While the tone of the data has improved in recent weeks, the economy's sluggish pace and a deeply troubled job market have kept alive fears of another downturn.
Acknowledging the flagging recovery, the Fed opened the door to more easing at its last gathering on August 10, when it announced it would resume purchases of longer-term Treasury securities to prevent its portfolio from shrinking as the mortgage-linked debt it holds matures.
