In its statement, the Fed said it will also keep spending $85 billion a month on bond purchases to drive down long-term borrowing costs and stimulate economic growth.The Fed will spend $45 billion a month on long-term Treasury purchases to replace a previous bond-purchase program of an equal size. And it will keep buying $40 billion a month in mortgage bonds. Those purchases, and the Fed's commitment to low rates, are intended to spur borrowing and spending in an economy still growing only modestly 3Â½ years after the Great Recession ended. Still, Bernanke warned that none of the Fed's actions could outweigh the economic pain that would be caused by sharp tax increases and government spending cuts that are set to kick in next month. The standoff between President Barack Obama and Republican lawmakers over how to resolve the "fiscal cliff" is already hurting the economy, in part by reducing consumer and business confidence, he said. Fed policymakers are hopeful that the crisis can be resolved without significant long-term economic damage, Bernanke said. They foresee slightly faster growth next year and a gradual decline in unemployment. Bernanke's comments about the impact of the fiscal cliff seemed to raise some concern among investors. Stocks had risen after the Fed's statement was released. But by the end of Bernanke's news conference, market averages were mixed. The Dow Jones industrial average closed down about 3 points. The Standard & Poor's 500 index rose fractionally. With its new purchases of long-term Treasurys, the Fed's investment portfolio, which is nearly $3 trillion, will swell to nearly $4 trillion by the end of 2013 if its bond purchase programs remain fully in place. The Fed's plan to keep stimulating the economy at least until unemployment has reached 6.5 percent is intended to reassure consumers, companies and investors about the health of the economy, said Joseph Gagnon, a former Fed official who is a senior fellow at the Peterson Institute for International Economics.