Bernanke: Fed Is Ready for 'Unconventional Measures’

Federal Reserve Board chairman Ben Bernanke said Friday that the central bank realizes further monetary policy accommodation could be needed in the future and is prepared to take “unconventional measures” in response to the deteriorating economic outlook.

Bernanke pointed to weak economic growth and high unemployment in the prepared text of his speech to the Federal Reserve Bank of Kansas City’s annual Economic Symposium in Jackson Hole, Wyo. He said financial conditions are improved but bank credit remains tight and “much of the work of implementing financial reform lies ahead.”

Bernanke said the Fed will do all that it can to sustain the nascent recovery. He said economic growth fostered via fiscal stimulus and inventory rebuilding is already giving way to consumer spending and business investment, and the risk of undesirable inflation is low.

“The issue at this stage is not whether we have the tools to help support economic activity and guard against disinflation,” the Fed chief said. “The question is whether ... the benefits of each tool, in terms of additional stimulus, outweigh the associated costs.”

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