WASHINGTON — The Federal Reserve sketched a dim outlook for the economy Tuesday, suggesting it will remain weak for two more years.

As a result, the Fed said it expects to keep its key interest rate near zero through mid-2013.

It’s the first time the Fed has pegged its “exceptionally low” rates to a specific date. The Fed had previously said only that it would keep it key rate at record lows for “an extended period.”

Stocks plunged after the statement was released, but then shot up shortly after. The Dow Jones industrial average sank more than 176 points, then recovered its losses and gained more than 120 points in late-afternoon trading.

Many investors sought the safety of long-term Treasurys, whose yields fell as low as 2.07 percent.

The Fed’s two-year time frame for any rate increase underscored a stark reality: A sluggish economy and painfully high unemployment have become chronic.