If economic growth doesn't pick up in the second half of this year, Fed Chairman Ben Bernanke told the Financial Services Committee this morning that the Fed is prepared to engage in additional asset purchases.
Bernanke's speech also signaled that interest rates were going to remain at their record low near-zero rate, where its been since Dec. 2008.
Bernanke said in prepared remarks that the economy is growing more slowly than expected, and should that continue the central bank stands at the ready with more accommodative measures.
"Once the temporary shocks that have been holding down economic activity pass, we expect to again see the effects of policy accommodation reflected in stronger economic activity and job creation," he said
"However, given the range of uncertainties about the strength of the recovery and prospects for inflation over the medium term, the Federal Reserve remains prepared to respond should economic developments indicate that an adjustment in the stance of monetary policy would be appropriate."
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