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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.
His comments came as he testified before the House of Congress in Washington. 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 a programme was adopted, the measures needed to work quickly and to be temporary in nature. 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.