Accommodative monetary policies are still necessary to support the economy, but the Federal Reserve Board is prepared to withdraw stimulus when needed, Fed chairman Ben S. Bernanke testified before the House Financial Services Committee yesterday.
“In due course, however, as the expansion matures, the Federal Reserve will need to begin to tighten monetary conditions to prevent the development of inflationary pressures,” Bernanke said, according to prepared text released by the Fed.
“The Federal Reserve has a number of tools that will enable it to firm the stance of policy at the appropriate time.”
