Ben Bernanke has outlined extra stimulus options the US Federal Reserve could use if the economy remains weak, acknowledging the possibility of a return to monetary easing.
“The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying a need for additional policy support,” the Fed chairman told the House Financial Services committee on Wednesday.
Mr Bernanke’s comments suggest that the Fed has returned to a more balanced outlook for future policy, with the possibility that its next move will be further easing instead of tightening.
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