WASHINGTON - The Federal Reserve signaled Wednesday that it stands ready to use new unconventional tools, or expand existing ones, to spur lending and consumer spending that could help lift the economy out of a painful recession.

The Fed also agreed to keep the targeted range for the federal funds rate between zero and 0.25 percent for "some time" to help brace the economy. Economists predict the Fed will keep the funds rate, the interest banks charge each other on overnight loans, at that record low level through the rest of this year.

With its key lending rate to banks already near zero, the Fed pledged anew to use "all available tools" to revive the economy.

Specifically, the Fed said it is "prepared" to buy longer-term Treasury securities if the circumstances warrant such action. At its previous meeting in December, the Fed said it was merely evaluating that option.

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, was the sole dissenter on this point. He wanted the Fed to move forward on buying the securities.

Doing so would help drive down mortgage rates and provide help to the stricken housing market, economists said.

For example, many 30-year fixed-rate mortgages and other home loans, are pegged to the 10-year Treasury note. If the Fed were to buy that security, it would push down rates on mortgages connected to it. The same logic would apply to other Treasury securities.

"So many consumer rates are pegged to Treasury rates - homes, cars," said Joel Naroff, president of Naroff Economic Advisors. "If the economy is to recover, consumers need to borrow and need to borrow at reasonable rates. The Fed made clear that it is prepared to make that happen."

The Fed also said it "stands ready" to expand another program aimed at providing relief to the crippled mortgage market.

Under that program, the Fed is buying up to $500 billion in mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. It also has agreed to buy up to $100 billion of Fannie and Freddie debt.

Mortgage rates have fallen since the program's announcement late last year. The Fed said it could buy more of these securities or extend the length of the program.

The Fed on Tuesday took steps to curb home foreclosures as required by a 2008 law. The relief would apply to mortgage assets the Fed is holding because of last year's bailouts of Bear Stearns and insurer American International Group. Distressed borrowers could see the amount they owe on their home loan lowered or their interest rate reduced, among the options for help.