Reiterating that the Federal Reserve has a “range of tools” that would provide economic stimulus, its chairman, Ben Bernanke, said the Federal Open Market Committee will do what is needed to promote a stronger recovery with an eye on price stability.”
“In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus,” said in a prepared text of his remarks released by the Fed. “We discussed the relative merits and costs of such tools at our August meeting. My FOMC colleagues and I will continue to consider those and other pertinent issues, including, of course, economic and financial developments, at our meeting in September and are prepared to employ these tools as appropriate to promote a stronger economic recovery in a context of price stability.”
Turning to positives, Bernanke said the U.S. economy has “a highly diverse mix of industries and a degree of international competitiveness that, if anything, has improved in recent years. Our economy retains its traditional advantages of a strong market orientation, a robust entrepreneurial culture, and flexible capital and labor markets. And our country remains a technological leader, with many of the world’s leading research universities and the highest spending on research and development of any nation.
“Thus I do not expect the long-run growth potential of the U.S. economy to be materially affected by the financial crisis and the recession if — and I stress if — our country takes the necessary steps to secure that outcome.”