Bernanke: Fed could act again to stimulate economy

Photo

Photo by: Associated Press

Federal Reserve Chairman Ben Bernanke speaks at a news conference at the Federal Reserve in Washington, D.C., on Wednesday.

Associated Press

WASHINGTON

Content for now with the current course, Federal Reserve Chairman Ben Bernanke left open the possibility Wednesday that the Fed will take further action to stimulate the economy and reduce unemployment — but not at the cost of high inflation.

He spoke to reporters after Fed policymakers ended a two-day meeting by sticking to their plan to keep interest rates near zero through at least late 2014. The officials said the economy is growing moderately and that the pace will likely pick up.

But they also cautioned that unemployment won’t fall sharply anytime soon and that risks from Europe’s debt crisis remain.

In a statement, they noted that inflation has risen, mainly because of gasoline prices, and they expect the spike to be temporary.

Since the financial crisis, the Fed has pursued two rounds of bond purchases to try to push down long-term interest rates, with a goal of encouraging borrowing and spending.

Bernanke told reporters that more bond purchases, or other steps by the Fed, are still an option if the economy weakens.

“Those tools remain very much on the table,” Bernanke said.