The US Federal Reserve said that it will keep buying government bonds until the economy makes substantial progress - a step intended to reassure financial markets and keep long-term borrowing rates low indefinitely. The Fed also reiterated after its latest policy meeting that expects keep its short-term benchmark interest rate near zero through at least 2023. The Fed has kept its key rate there since March, when it took a range of extraordinary steps to fight the pandemic recession by keeping credit flowing. Fed Chairman Jerome Powell said a "full economic recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities." In a series of economic projections Wednesday, though, Federal Open Market Committee painted a brighter picture of the economy next year, compared with its previous projections in September. The improvement likely reflects the expected impact of the new coronavirus vaccines. The policymakers now foresee the economy contracting 2.4% this year, less than the 3.7% decline it envisioned in September. For next year, with anticipation of a rebound, the officials have upgraded their growth forecast from 4% to 4.2%. By the end of 2021, the Fed expects the unemployment rate to fall to 5% from the current 6.7% — lower than the 5.5% rate it had forecast in September. The Fed's latest policy statement coincides with an economy that is stumbling and might even shrink over the winter as the raging pandemic forces new business restrictions and keeps many consumers at home. Weighing the bleak short-term outlook and the brighter long-term picture has complicated the Fed's policymaking as it assesses how much more stimulus to pursue. With its benchmark rate already near zero, the Fed has turned to bond purchases, buying $80 billion of Treasury securities and $40 billion of mortgage-backed bonds a month. Those moves indirectly lower rates on mortgages, auto loans and credit cards, with the aim of encouraging more borrowing and spending.