Bernanke open to new stimulus program
Washington, DC, United States (AHN) – U.S. Federal Reserve Chairman Ben Bernanke said on Wednesday that the central bank is open to another stimulus program if it were necessary to help the ailing American economy.
However, Bernanke said that for the moment the move was not yet imminent. The hint of more active measures to jump start the economy is in contrast to the chairman’s statement a few weeks ago that the Fed would stand back amid the slow recovery.
Bernanke told the House Financial Services Committee that the Fed is keeping all options open because of a lack of clear indication where the economy is headed. The options include maintaining existing aid programs for a longer period, new asset purchases to lower interest rates, or encouraging banks to withdraw money kept on reserve at the central bank and loan it.
Washington ended two weeks ago its second stimulus program, leading to speculations that there will be a third one.
The chairman also warned legislators of a major crisis on the global financial system if the U.S. defaults on its debt as the country’s Aug. 2 deadline to raise Washington’s $14.3-trillion debt limit is just more than two weeks away and political leaders are still deadlocked on raising the limit.
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