WASHINGTON — The Federal Reserve took no new steps to support the economy Wednesday, but it said in a statement that it was ready to act if job growth did not improve. 
 
 The statement, released after a meeting of the Fed’s policy-making committee, said that the rate of economic growth had slowed in recent months and was likely to remain “moderate over coming quarters.” As a result, the Fed said it expected the unemployment rate to decline “only slowly.” 
 
 But the central bank deferred any effort to improve the situation at least until the committee’s next scheduled meeting in mid-September. 
 
 “The committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability,” it said. 
 
 That was stronger language than it used after its previous meeting in June, when it said that it was “prepared” to act. 
 
 And the Fed’s chairman, Ben S. Bernanke, has said that the Fed is “committed to ensuring, or at least doing all we can to ensure” that unemployment continues to decline, suggesting officials may simply be waiting to see the government’s estimates of job growth in July and August, which will be released before the committee reconvenes Sept. 12 and 13. 
 
 The absence of action appeared to disappoint some equity investors. The Standard & Poor’s 500-stock index fell 4 points, or 0.29 percent, Wednesday, to 1,375.32. The Dow Jones industrial average dropped sharply after the Fed’s announcement, and then traded erratically before closing near its session low. It fell 37.62 points, also 0.29 percent, to 12,971.06. 
 
 But much of the market’s attention already has turned to the September meeting, when the Fed also will update its economic projections. 
 
 “This statement will at least raise some new doubts about whether the Fed will be easing again this year,” Jim O’Sullivan, chief United States economist at High Frequency Economics, wrote in a note to clients Wednesday. “We still expect they will, assuming that growth remains fairly sluggish, but for now at least the statement keeps the debate open.” 
 
 Mr. Bernanke will have an opportunity to clarify his views when he speaks at an annual monetary policy conference in Jackson Hole, Wyo., at the end of August. 
 
 Some Fed officials suggested recently that the weak rate of growth required new action. They said that the unemployment rate had stagnated above 8 percent since January, and that the most recent economic forecasts by Fed officials, published in June, projected the rate would decline slightly, if at all, during the second half of the year. 
 
 But there were no votes for action at the meeting that ended Wednesday. Among the 12 officials who vote on monetary policy, the only dissent from the decision to stand pat came from an official who has consistently pressed for the Fed to do less, Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond. 
 
 The Fed already is engaged in a wide-ranging effort to spur growth by cutting interest rates, punishing savers and rewarding borrowers. The central bank has held its benchmark rate near zero since late 2008, and said that it planned to maintain that policy at least until late 2014. It has put further pressure on long-term rates by amassing a portfolio of almost $3 trillion in long-term Treasury securities and mortgage-backed securities. And it said in June that it would keep buying bonds through the end of the year. 
 
 But those efforts have proved insufficient to set off a strong recovery. The economy has slogged along somewhere between crisis and prosperity for more than three years now. Unemployment remains pervasive; more than 23 million Americans cannot find full-time jobs. And the Fed, while insisting that it could do more, has so far declined to prove it. 
 
 Some Fed officials remain uncertain that the economy needs help. Economic indicators are imprecise, particularly in times of turbulence. Some officials also doubt the Fed can help. Cheap loans are at best an indirect means of addressing problems like the decline in government spending, tight credit standards and high levels of household debt. 
 
 Vincent Reinhart, chief United States economist at Morgan Stanley, said that the Fed appeared “resigned to subpar economic performance” because it lacked confidence in the available tools. “If it were more confident, it would have done more,” said Mr. Reinhart, who worked as the Fed’s chief monetary policy staff member under Mr. Bernanke. ||||| WASHINGTON (MarketWatch) — A cautious Federal Reserve on Wednesday said that the economy was weaker but took no new action to help stimulate demand. 
 
 The lack of any policy action was a surprise. Analysts had expected the Fed to at least push out its pledge to hold its benchmark federal funds rate exceptionally low. Instead, the Fed repeated that it would likely hold that rate steady until late 2014. Read text of FOMC decision. 
 
 Federal Reserve Chairman Ben Bernanke 
 
 Many economists had thought that the Fed might announce a major new asset-purchase plan. 
 
 U.S. stocks SPX, -1.13% dropped in the immediate aftermath of the Fed decision. 
 
 Joe LaVorgna, chief economist at Deutsche Bank, welcomed the Fed’s inaction. “The training wheels need to come off the bike and the economy needs to be left alone,” he said. 
 
 As expected, the Fed left unchanged the federal funds rate target at zero to 0.25%, the level it has been at since December 2008. 
 
 The central bank downgraded its view on the economy, saying that economic activity had decelerated. Previously, the Fed had said that the economy had been expanding moderately. 
 
 Since the recession officially ended in the summer of 2009, the economy has sputtered along with the unemployment rate stuck above 8%. 
 
 The Fed did leave the door open for action. 
 
 The FOMC promised to “closely monitor incoming information on economic and financial developments” and said it “will provide additional accommodation as needed.” 
 
 This is a slightly stronger promise that in June, when it said that it was “prepared to take action as appropriate.” 
 
 Ward McCarthy, chief financial economist at Jefferies, said the Fed is “ready to pull the trigger” if the bar of sustained improvement in the labor market is not met or if downside risks intensify. 
 
 But Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said the statement raised doubt about whether the Fed will be easing again this year. “We still expect they will, assuming growth remains fairly sluggish, but for now at least the statement keeps the debate open,” he wrote in a note. 
 
 Bernanke will discuss policy options in his annual speech at the Fed’s Jackson Hole retreat on Aug. 31. 
 
 Many economists are convinced the Fed will launch a new asset-purchase program, including the buying of mortgage-backed securities, at its next policy meeting in September. 
 
 But others are not so sure that more purchases, or quantitative easing, is inevitable. 
 
 Expectations too high for Fed, ECB? (3:55) In the context of Mario Draghi's "whatever it takes" comment, are hopes set unattainably high for the Fed and ECB? Spencer Jakab discusses on Markets Hub. (Photo: Reuters) 
 
 The Fed will have two more unemployment reports, including one on Friday, before its next meeting. Officials want to gauge whether growth will likely remain moderate and pick up gradually as forecast or if the recent soft patch is becoming something more severe. 
 
 The FOMC vote on Wednesday was 11 to 1. The dissenter was Richmond Fed President Jeffrey Lacker, who has dissented at every meeting this year. 
 
 Lacker wanted the Fed to omit any guidance on how long rates will stay exceptionally low. 
 
 Last month, the Fed extended its Operation Twist program until the end of the year. The Fed is selling short-term government securities and buying longer-term Treasurys in a bid to lower long-term interest rates. 
 
 John Lonski, chief economist at Moody’s Capital, said there was no reason for additional stimulus at the meeting as equity markets have firms and credit spreads have been relatively well behaved. “Financial markets are not in need of additional support right now,” he added. 
 
 Lonski also said investors would be closely watching European Central Bank President Mario Draghi’s press conference following the central bank’s policy meeting Thursday. 
 
 If Draghi follows though on his pledge to do whatever it takes to support the Europe, it will relieve pressure on the Fed to take additional action, he commented. Read ECB preview. 
 
 More from MarketWatch ||||| 1 of 3. Federal Reserve Chair Janet Yellen answers a question at a news conference following the March 2014 Federal Open Market Committee meeting, while at the Board of Governors of the Federal Reserve System in Washington, March 19, 2014. 
 
 WASHINGTON (Reuters) - The U.S. Federal Reserve will probably end its massive bond-buying program this fall, and could start raising interest rates around six months later, Fed Chair Janet Yellen said on Wednesday, in a comment which sent stocks and bonds tumbling. 
 
 Yellen's remarks at her first news conference as the head of the central bank pointed to a more aggressive path toward higher interest rates than many had anticipated, and bets in financial markets shifted accordingly. 
 
 The comments came after a two-day meeting in which Fed officials made another reduction in their bond-buying stimulus and decided to jettison a set of guideposts they were using to help the public anticipate when they would finally raise rates. 
 
 The Fed said the change in its rate hike guidance did not mark a shift in its intentions and that it would wait a "considerable time" after shuttering its asset purchase program before pushing borrowing costs higher. 
 
 Yellen, who had fielded numerous questions without a hitch, hesitated when asked what the Fed meant by "considerable." 
 
 "I -- I, you know, this is the kind of term it's hard to define, but, you know, it probably means something on the order of around six months or that type of thing. But, you know, it depends -- what the statement is saying is it depends what conditions are like." 
 
 Several analysts wondered whether her answer was an unintended slip, given the deliberately vague language of the Fed's statement. 
 
 Either way, the reaction in financial markets was swift and sharp. Prices for U.S. stocks and government bonds added to earlier losses triggered by fresh Fed forecasts that showed policymakers are inclined to raise rates a bit more aggressively than they had been just a few months ago. The U.S. dollar rose. 
 
 "The forecast change could be interpreted as a relatively hawkish shift ... and as such the general market reaction seems well-founded," said JPMorgan economist Michael Feroli. 
 
 Futures traders moved to price in a first interest rate hike as soon as April 2015. Previously, it was July. 
 
 Most top Wall Street economists, however, continued to see the first rate hike in the second half of 2016, according to a Reuters poll. 
 
 MIXED MESSAGES 
 
 Yellen sought to use her news conference to emphasize that rates would stay low for awhile and rise only gradually. She also said they could end up staying lower than normal "for some time" even after the jobless rate drops to a healthy level. 
 
 The Fed would look not only at how close inflation and unemployment are to its goals, but how fast, or slowly, those measures are approaching those goals, she said. 
 
 At 6.7 percent, the unemployment is well above the 5.2 percent to 5.6 percent range Fed officials see as in keeping with full employment. The central bank's favored inflation gauge is barely more than half of its 2.0 percent target. 
 
 The Fed has held interest rates near zero since late 2008 and has pumped more than $3 trillion into the economy with its bond purchases to try to foster a stronger recovery. 
 
 Of the Fed's 16 policymakers, only one believes it will be appropriate to raise rates this year; 13 expect a first rate hike next year, and two others see the first rate hike coming in 2016, according to the new forecasts. 
 
 But once rate hikes start, Fed officials see slightly sharper increases than they did in December, when they last issued forecasts. They now see rates ending 2016 at 2.25 percent, a half percentage point above their December projections. ID:nL2N0MG1AP] 
 
 The unease in markets "might be a sign that people think Yellen will tighten sooner rather than later," said Wayne Kaufman, chief market analyst at Rockwell Securities in New York. 
 
 MEASURED WIND DOWN 
 
 The central bank proceeded with its well-telegraphed reductions to its massive bond-buying stimulus, announcing it would cut its monthly purchases of U.S. Treasuries and mortgage-backed securities to $55 billion from $65 billion. 
 
 The decision to further scale back its stimulus keeps the Fed on track for the measured wind down laid out by Yellen's predecessor, Ben Bernanke. The Fed repeated that it plans to continue trimming the purchases in "measured steps" as long as labor conditions continue to improve and inflation shows signs of rising back toward the Fed's 2.0 percent goal. 
 
 The Fed's assessment of the U.S. economy chalked up recent weakness partly to adverse weather. 
 
 It had said since December 2012 that it would not consider raising short-term rates until the jobless rate fell to at least 6.5 percent, as long as inflation looked set to remain contained. 
 
 But the unemployment rate has fallen faster than anticipated, and officials dropped the guidance, saying they would look at a range of economic indicators to judge the economy's readiness for higher rates. 
 
 Minneapolis Fed President Narayana Kocherlakota dissented, saying that getting rid of the numerical guidance could hurt the credibility of the Fed's commitment to return inflation to 2.0 percent. 
 
 (Reporting by Ann Saphir and Krista Hughes; Additional reporting by Jason Lange in Washington and Chuck Mikolajczak in New York; Editing by Tim Ahmann and Andrea Ricci)
– Wall Street has been waiting anxiously for a few days now to see what the Fed was going to do about the economy, and the answer arrived this afternoon: Nothing. For now. The Fed sees evidence that the economy has actually decelerated in recent months, reports MarketWatch, but it's not going to enter into new bond-buying or other such stimulus until the picture clarifies in the next month or two. Friday's jobs report might be the first indicator. In Fed-speak: “The committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote stronger economic recovery and sustained improvement in labor market conditions," said its official statement. The Wall Street Journal parses the wording and thinks the Fed "signaled more strongly" that it will eventually take action. The New York Times, too, calls the language "somewhat stronger" than past statements.