Fed 'Prepared To Employ Its Tools,' But No New Steps Now

Federal Reserve Chairman Ben Bernanke spoke today in Jackson Hole, Wyo., the same place where last summer he signaled a major policy shift, the second round of quantitative easing. Today, as expected — he said nothing exciting.

...the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September , which has been scheduled for two days (the 20th and the 21st) instead of one to allow a fuller discussion. The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability.

The Fed has pledged to keep short-term interest rates near zero for the next two years, in an effort to encourage more borrowing and spending.

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