At a news conference, chairman Ben Bernanke said that if conditions worsen, the Fed would consider buying more mortgage-backed securities. He declined to be more specific.
“Bernanke did not go out of his way to dampen growing expectations’’ that another round of purchases is coming, said Dana Saporta, an economist at Credit Suisse. “If anything, he stoked those expectations.’’
Still, a more aggressive effort would probably face resistance within the Fed. The economy would have to deteriorate before the Fed would launch another round of purchases, said Ian Shepherdson of High Frequency Economics.
The Fed predicts the economy will grow no more than 1.7 percent for 2011. For 2012, it foresees growth of about 2.7 percent. Both forecasts are roughly a full percentage point lower than in June.
The Fed sees unemployment averaging 8.6 percent by the end of next year. In June, it had predicted unemployment would drop next year to as low as 7.8 percent.
The current US rate is 9.1 percent. The Massachusetts jobless rate for September was 7.3 percent.
The Fed’s outlook is similar to many private forecasts. Bank of America Merrill Lynch, for example, expects 1.8 percent growth this year and 2.1 percent in 2012. Such growth rates are far too low to drive down unemployment.
Bernanke acknowledged the pace of growth will probably remain “frustratingly slow’’ and said, “we remain prepared to take action as appropriate to make sure the recovery continues.’’
Even so, the Fed said, the economy had improved since nearly stalling in the spring. As a result, it is putting off any new actions so it can gauge the impact of steps it has already taken.
Fed policy makers made the announcement after a two-day meeting.
In a statement, they said consumers have stepped up spending. Still, they said, the economy continues to face significant risks, including the debt crisis and a risk of recession in Europe.
Bernanke cited Europe’s debt crisis as a particular concern, because it could threaten confidence and hold back growth.
