Wall Street showed disappointment with the Federal Reserve's limited help to bolster the tepid pace of growth in the world's largest economy, even as Chairman Ben Bernanke promised policy makers were ready to do whatever needed.
"We are prepared to do what is necessary. We are prepared to provide support for the economy," Bernanke said at a news conference following a two-day policy meeting.
The central bank is boosting its so-called Operation Twist - selling short-term securities and buying long-term ones - by US$267 billion. It kept interest rates unchanged as it downgraded expectations for the US economic expansion.
The Fed cut its forecasts for US growth this year to a range of 1.9 per cent to 2.4 per cent, down from an April estimate of 2.4 per cent to 2.9 per cent. It also slashed predictions for 2013 and 2014.
"The Fed is going to continue taking long-term assets out of the marketplace," Bret Barker, a portfolio manager at Los Angeles-based TCW Group, told Bloomberg News. "The Fed's goal is to take volatility out of the market, keep rates low and stable."