WASHINGTON — The Federal Reserve is trying again to jolt the American economy out of its stalled recovery. It's extending a program that aims to encourage borrowing and spending by reducing long-term interest rates.

WASHINGTON — The Federal Reserve is trying again to jolt the American economy out of its stalled recovery. It's extending a program that aims to encourage borrowing and spending by reducing long-term interest rates.

Wednesday's decision followed months of concern that the economy is being held back by a weakened job market.

At the end of a two-day policy meeting, the Fed also sharply reduced its forecast for U.S. growth and said it's prepared to take more action if necessary. It reiterated plans to keep short-term interest rates at record lows until at least late 2014.

"If we're not seeing a sustained improvement in the labor market, that would require additional action," Fed Chairman Ben Bernanke said later in the day.

Wall Street wasn't impressed by the Fed's limited response. Stock prices barely budged. And analysts questioned how much benefit the Fed's latest economy-boosting effort would have, in part because interest rates are already near record lows.

If the Fed's more pessimistic outlook proves accurate, President Barack Obama's chances in an election that will turn on the economy would also likely suffer.

Bernanke noted that the economy is under threat from Europe's debt crisis and the prospect of sharp spending cuts and tax increases that would take effect at the end of the year unless Congress acts.

European leaders will be seeking a breakthrough at a summit next week in Brussels. Bernanke said he's in regular touch with the head of the European Central Bank.