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Federal Reserve Chairman Ben Bernanke signaled that the Fed was prepared to offer further stimulus.
Chairman Ben Bernanke signaled on Friday that the Federal Reserve was prepared provide further stimulus if the US economy did not improve, according to The Associated Press.
Bernanke did not outline what specific measures the Fed would take, such as bond purchases to lower long-term interest rates. He did, however, say that unemployment was a "grave concern" and the Fed would take steps to boost the "far from satisfactory" economy.
Speaking at the Kansas City Fed's Jackson Hole symposium, Bernanke said, "Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability," according to Reuters.
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Bernanke attributed the job market's weakness to the result of cyclical problems in the economy, such as a lack of demand, rather than structural problems, such as a mismatch of skills, The Wall Street Journal noted. The Fed feels it can help cyclical problems, as opposed to structural problems.
He also defended the Fed's policies until now, saying, "The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant," according to Bloomberg.
Bernanke also said the Fed's previous rounds of large asset purchases drove stocks higher, created 2 million jobs and improved financial markets, according to CNN Money.
According to the AP, investors were disappointed by the lack of specifics in Bernanke's speech, with stocks losing some gains after the speech was made public.
The US economy's growth has slowed again, expanding by only 1.7 percent in the April to June quarter, according to government estimates.