By Pedro da Costa and Mark Felsenthal
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"Economic growth strengthened somewhat in the third quarter," the Fed said in its post-meeting statement. "There are significant downside risks to the economic outlook, including strains in global financial markets."
However, Charles Evans, president of the Chicago Fed, dissented against the decision because he believed the central bank should take additional policy action at this meeting.
The Fed did not offer any hints that it was considering additional purchases of mortgage-backed securities or a major overhaul in its communications policies, two options that appeared to be on the table.
Hinting that further bond purchases remain an option, the central bank reiterated that it was prepared to adjust its balance sheet as needed to foster recovery.
Analysts will get more clarity on the Fed's outlook for the economy when the Fed releases quarterly economic forecasts at 2 p.m. (1800 GMT), followed shortly after by a news conference with Fed Chairman Ben Bernanke.
The U.S. central bank's debate over the course of policy
comes against a troubled global backdrop and with the U.S. economy far from full health.
Greece's call for a referendum on the latest euro zone debt deal dashed hopes Europe had finally come to grips with its debt crisis, sending global equity markets into a tailspin.
The U.S. recovery, for its part, remains anemic and could be knocked off course if Europe fails to quell its crisis.
A report on Wednesday showed U.S. private-sector payrolls expanded by 110,000 workers in October, not enough to signal a robust hiring revival, while data on Tuesday showed growth in the manufacturing sector slowed to a crawl.
The economy grew at a 2.5 percent annual pace in the third quarter, a significant improvement over the second quarter's 1.3 percent increase but still too soft to put a dent in the nation's 9.1 percent unemployment rate.
HOUSING BACK IN PLAY?
Faced with a still-weak recovery, the Fed decided in September to embark on a program to sell $400 billion in short-term Treasuries and invest the money in longer-dated bonds, an effort to keep long-term rates down.
It also dipped back into the mortgage market by reinvesting proceeds of its real estate bond holdings back into MBS.
Those actions followed an already aggressive series of steps to try to lift the economy. The central bank slashed benchmark interest rates to effectively zero in December 2008 and expanded its balance sheet to a record $2.8 trillion.
More recently, Fed Governor Daniel Tarullo and New York Federal Reserve Bank President William Dudley have hinted at the possibility of expanding the central bank's presence in the mortgage market. It has already bought some $1.25 trillion in MBS.
MBS purchases are seen as even more controversial than Treasury bond buys. Some Fed officials worry targeting a specific sector of the economy encroaches on fiscal policy, and policymakers had previously pledged to return to an all-Treasury portfolio.
The absence of any mention of this tool in the statement suggests there is not enough consensus around the idea just yet.