MercoPress. South Atlantic News Agency

US economy recovery “softened” but Fed ready to take further steps

Federal Reserve chairman Ben Bernanke

Federal Reserve Chairman Ben Bernanke said the economic recovery has softened more than expected and the Fed is ready to take further steps if needed to spur the stumbling economy.

“The committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly,” he said in remarks prepared for delivery at a Fed conference.

Bernanke said the US central bank's purchases of longer-term securities have been effective in lowering borrowing costs and that he believes the benefits of buying more such assets, if needed, would outweigh any disadvantages.

Other options --such as committing to hold rates exceptionally low for an even longer period than is currently priced in to markets, or raising the Fed's inflation targets-- would be less effective, he said.

However, he made clear the Fed has not decided what would prompt additional Fed easing.

“At this juncture, the committee has not agreed on specific criteria or triggers for further action,” he said.