Bernanke: Fed Prepared to Act

Federal Reserve Chairman Ben Bernanke on Wednesday signaled he is prepared to take more unconventional policy steps if the weak U.S. economy worsens too much.

Mr. Bernanke stressed the Fed is watching price trends very closely. "If inflation itself falls too low or inflation expectations fall too low, that would be something we'd have to respond to because we don't want deflation," Mr. Bernanke said in a question-and-answer session after a speech in Cleveland.

The Fed chief didn't say he sees deflation -- or a debilitating decline in prices -- as a risk right now. Prices have actually been rising above the Fed's 2.0% comfort zone in recent months. Mr. Bernanke said inflation expectations currently indicate that price increases will average around 2% over the coming years, which is where the central bank wants to see them.

Read Full Article from Wall Street Journal

- Posted: 2011-09-29 11:36:47

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