(Bloomberg News) Federal Reserve policy makers said they expect growth to gradually accelerate, while refraining from new actions to lower borrowing costs.

"The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually," the Federal Open Market Committee said in a statement at the conclusion of a two-day meeting today in Washington. "Despite some signs of improvement, the housing sector remains depressed," the panel said.

Policy makers led by Chairman Ben S. Bernanke are holding off on additional steps to boost the economy amid signs the more than two-year expansion is gaining strength. Still, the jobless rate isn't declining fast enough to satisfy central bankers, who repeated their view today that borrowing costs are likely to remain "exceptionally low" at least through late 2014.

Today's statement said that "strains in global finanancial markets continue to pose significant downside risks to the economic outlook." The Fed has cited the risk from "strains in global financial markets" in its previous five meetings. In March it said those strains had "eased."

The Fed will release policy makers' forecasts for growth, inflation, unemployment and interest rates at 2 p.m. today. Chairman Bernanke will hold a press conference at 2:15 p.m. to explain the forecasts and the Fed's statement.

The central bank said it would continue its swap of $400 billion of short-term debt with long-term debt to lengthen the average maturity of its holdings, a move dubbed Operation Twist. The Fed is scheduled to complete the program at the end of June. The Fed also didn't alter its policy of reinvesting its portfolio of maturing housing debt into agency mortgage-backed securities.

Gasoline Prices

Inflation "has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline," the Fed said today. Gas prices will affect inflation "only temporarily," it said.

Oil prices have declined since the Fed's March meeting, and the national average cost of gasoline has fallen to $3.84 a gallon from a 2012 peak of $3.94 on April 4, according to the American Automobile Association.

Richmond Fed President Jeffrey Lacker dissented for the third meeting in a row. Lacker has said he believes the first increase in interest rates will likely be necessary in 2013.

Fed policy makers met amid renewed concern over Europe's fiscal crisis. The benchmark Stoxx Europe 600 Index of European countries hit a three-month low on April 23 and has since rallied as companies, including Electrolux AB, posted earnings that beat estimates.

In the U.S., consumer spending is starting to power growth as business investment cools. A report today showed orders for durable goods fell in March by the most in three years, indicating manufacturing will contribute less to growth this year.

Retail sales rose more than forecast in March as Americans snapped up everything from cars and furniture to clothes and electronics. The 0.8 percent gain was almost three times as large as projected and followed a 1 percent advance in February, Commerce Department figures showed April 16.

An April 27 government report may show that gross domestic product rose at a 2.5 percent annual rate, according to the median forecast in a Bloomberg News survey of economists, driven by the biggest increase in household demand in a year.

Consumer confidence has been lifted by an improving labor market and gains in stocks, along with signs that the housing market may be stabilizing. The Bloomberg Consumer Comfort Index last week matched the highest level in four years.

Company Earnings

Corporate earnings and an improving economic outlook are powering stock-market gains. The Standard & Poor's 500 index was up 9.1 percent this year as of yesterday.

"Despite its struggle with the sustained period of relative high unemployment, we're pleased to see some early signs of a slowly improving macroeconomic environment" in the U.S., Muhtar Kent, president and chief executive of Coca-Cola Co., the world's largest soft-drink maker, said in an April 17 earnings call.

More than 82 percent of companies in the S&P 500 that reported quarterly results since April 10 topped the average analyst earnings estimate, according to data compiled by Bloomberg as of yesterday. Companies from AT&T Inc. to 3M Co. beat analysts' earnings projections. International Business Machines Corp. boosted a stock buyback by $7 billion and increased its dividend yesterday.

Kimberly-Clark Corp., maker of Kleenex tissue and Huggies diapers, views the global economy as "similar to or perhaps slightly better than" January, Chief Executive Officer Thomas Falk said in an April 20 conference call. "In the U.S., the economic environment seems to be improving rather modestly," he said.

Demand for new U.S. homes was stronger than projected in March, Commerce Department data showed yesterday. Houses sold at a 328,000 annual rate, down from an upwardly revised 353,000 pace in February that was the highest in two years.

The improvement helped D.R. Horton Inc., the largest U.S. homebuilder by volume, beat analysts' earnings estimates when it reported second quarter results on April 23. A "strong" sales pace has continued through the first half of April, Chairman Donald R. Horton said in a statement as the company predicted stronger closings and profitability in the second half of the fiscal year.

A cooling labor market may limit gains in household demand. Employers added 120,000 jobs in March, the least since October. That capped a six-month period in which jobs grew by 1.1 million as the unemployment rate declined to 8.2 percent in March from 9 percent in September.

"Over the next several years, I anticipate that we will fall far short in achieving our maximum employment objective," Fed Vice Chairman Janet Yellen said in an April 11 speech endorsing the central bank's "highly accommodative" policy.

The yield on the 10-year Treasury declined to 1.97 percent late yesterday from 2.03 percent on March 12. The yield climbed to 2.38 percent on March 19, as speculation grew that the central bank may be forced to raise interest rates earlier than its late 2014 timeframe.

"The markets and a lot of other people started going in the direction of thinking the Fed might actually tighten policy some time next year," said Paul Dales, senior U.S. economist at Capital Economics in London. "That move has gone into reverse over the last couple of months."

In March, traders in the Fed funds futures market were betting the central bank would raise interest rates to 0.5 percent in December 2013. Traders currently do not expect a fed funds rate of 0.5 percent until September of 2014.

None of the 51 economists in a Bloomberg survey expected additional Fed asset purchases to be announced today. Fourteen percent of economists said such purchases would be announced at the Fed's meeting in June. Sixty-nine percent said the Fed would refrain from additional asset purchases. The remainder saw purchases as likely sometime after the second quarter of this year.

Central bankers have already taken unprecedented steps to boost the economy as it battled the longest and deepest recession since the Great Depression and its aftermath.

The Fed lowered its target interest rate to a range of zero to 0.25 percent in December 2008, and it purchased $2.3 trillion of assets in two rounds to push down longer-term borrowing costs.

In September 2011, the Fed announced a $400 billion program, known as Operation Twist, to extend the average maturity of assets on its balance sheet. At its January meeting, the FOMC said economic conditions would likely warrant keeping rates "exceptionally low" through late 2014, extending a previous date of mid-2013.