The Federal Reserve is prepared to take "unconventional measures" to prop up the US economic recovery, said Ben Bernanke in a speech today.
In an annual meeting with central bankers at Jackson Hole, Wyoming, the chairman said the "task of economic recovery and repair remains far from complete".
This follows the release of US GDP figures for the second quarter, showing an annual growth rate of 1.6%, much lower than the 2.4% expected from advance forecasts but higher than the 1.4% some commentators predicted.
Bernanke went on to say: "In many countries, including the US and most other advanced industrial nations, growth during the past year has been too slow and joblessness remains too high. Financial conditions are generally much improved, but bank credit remains tight; moreover, much of the work of implementing financial reform lies ahead of us."
These concerns mean appropriate action will need to be taken by the Government, he adds, to ensure a stable recovery.
With interest rates already near zero, Bernanke said further purchases of long-term securities and reducing the interest paid on excess reserves could be part of the measures.
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