Fed: Pace of US economy's decline is easing

No longer falling off a cliff.

Gone over the waterfall and headed downriver.

The peak weakness is over.

No matter what language analysts use, the idea is the same: The economy is still falling but at a slower pace than a couple months ago.

Fed weighs in

Now the Federal Reserve has added its own imprimatur to that view: "The pace of contraction appears to be somewhat slower," the central bank said in a statement Wednesday after the conclusion of its Open Market Committee.

The stock market shook off grim news about America's economic output Wednesday morning and soared in anticipation of the Fed's slightly less pessimistic statement since its March statement. As of 3:00 p.m. Wednesday, the Dow Jones Industrial Average was up by more than 190 points.

Stocks vs. economy

While many analysts now forecast a robust if bumpy rebound in stocks, few are willing to say the same for the economy just yet. The Fed also remains cautious, although it made no change to its aggressive plans announced in March to buy up to $1.25 trillion of mortgage-backed securities owned by Fannie Mae and Freddie Mac and up to $300 billion of Treasury securities by fall.

"Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time," the central bank said in its statement.