WASHINGTON - Showing a tough love stance for now, Federal Reserve Chairman Ben Bernanke and his colleagues decided to keep a key interest rate steady Tuesday. They acknowledged stresses in financial markets have grown, though, and hinted they stood ready to lower rates if needed.

Wreckage on Wall Street in recent days did not force the Fed — as some thought possible — to reverse course and cut rates. The Fed left its key rate at 2 percent for the third straight meeting. It marked the first meeting this year the Federal Open Market Committee, which sets interest rate policy, agreed unanimously with a decision.

The prime lending rate for millions of consumers and businesses stayed at 5 percent. The prime rate applies to certain credit cards, home equity lines of credit and other loans. The Fed's key rate and the prime rate are at four-year lows.

The Fed's view of economic and financial conditions, however, was more dour than its last assessment in early August. Economic growth appears to be slowing as consumers hunker down and export growth cools off a bit, Fed policymakers said. And, "strains in financial markets have increased significantly," the Fed said.

The more bearish tone indicates the Fed is again open to rate cuts down the road, some analysts believe.

"The Fed has opened the door to a rate cut that many thought was closed," said Stuart Hoffman, chief economist at PNC Financial Services Group. "I think there was more emphasis about the economy being weak."

The Fed said it would "act as needed."

In recent days, the American financial system has suffered its worst shakeout since the Great Depression as bad bets on dodgy mortgage-backed securities claimed more Wall Street giants.