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Fed chief Bernanke declares willingness to stimulate economy

Business Materials 9 September 2011 02:18
Federal Reserve Chairman Ben Bernanke said Thursday that the rate-setting central bank remains ready to take steps to loosen monetary policy to spur the lagging US economy.
Fed chief Bernanke declares willingness to stimulate economy

Federal Reserve Chairman Ben Bernanke said Thursday that the rate-setting central bank remains ready to take steps to loosen monetary policy to spur the lagging US economy, DPA reported.

In a speech to a business group in Minneapolis, Minnesota, Bernanke said that the members of the Fed's decision-making committee, which he heads, "are prepared to employ these tools as appropriate to promote a stronger economic recovery in a context of price stability."

The Fed has kept its benchmark interest rate near zero since December 2008, during the global financial crisis, when the US was suffering its worst contraction in 75 years.

Since then, the Fed has imposed two rounds of "quantitative easing," buying massive amounts of government bonds in an attempt to make money available for private investment in the economy.

At its last meeting on August 9, after mounting signs of deterioration in the economic recovery, the Fed took the unprecedented step of declaring that it was likely to keep interest rates at "exceptionally low levels" through at least mid-2013.

Signaling that the central bank has further means to try to spur the economy, Bernanke on Thursday said that he and his colleagues have "a range of tools that could be used to provide additional monetary stimulus." He did not specify what further steps could be taken, though speculation on Wall Street has included a further round of quantitative easing.

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