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Fed boss backs economic stimulus | Fed boss backs economic stimulus |
(10 minutes later) | |
Federal Reserve chairman Ben Bernanke has backed the introduction of certain tax or spending policies to help the flagging US economy avoid a recession. | Federal Reserve chairman Ben Bernanke has backed the introduction of certain tax or spending policies to help the flagging US economy avoid a recession. |
In testimony before the House of Congress, he said this would be helpful and also suggested the possibility of further interest rate cuts. | |
But he urged US lawmakers that if such measures were adopted, they needed to work quickly and be temporary. | |
He refused to be drawn on identifying specific policy measures. | He refused to be drawn on identifying specific policy measures. |
The Federal Reserve has cut interest rates three times since the summer, most recently in December, and US rates now stand at 4.25%. | |
During his speech, Mr Bernanke reiterated that the Fed was prepared to take "substantive action" to promote economic growth and adequately insure the US economy against downside risks. | |
To this end, he said the Fed would cut interest rates further "if necessary". | |
But he was also keen to emphasise the Fed's role in controlling inflation, which has risen recently because of higher energy costs and food prices. |