Federal Reserve Chairman Ben S. Bernanke said he would not rule out further bond purchases to boost growth and reduce unemployment, which he called a “grave concern.”
“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,” Bernanke said today in a speech to central bankers and economists at an annual forum in Jackson Hole, Wyoming.
Since the August meeting, data on housing, manufacturing and retail sales have exceeded expectations.
Since January, the Fed has said economic conditions would likely warrant keeping the rate “exceptionally low” through at least late 2014. The rate has been kept close to zero since December 2008.
Policy makers could also opt for a third round of large- scale asset purchases, known as quantitative easing, intended to push long-term borrowing costs lower.