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Nervous investors - and these days that's most investors - will be all ears this morning when Federal Reserve Chairman Ben Bernanke delivers a speech in Wyoming. They'll be listening for any clues about additional steps the Fed might take to shore up the sagging economy. Additional moves could be risky. But Bernanke might feel compelled to act if other parts of the government don't.

From Jackson Hole, Wyoming, NPR's Scott Horsley reports.

SCOTT HORSLEY: For the last three decades, central bankers, and the people who watch them, have been gathering each summer in this Rocky Mountain resort to do some deep thinking about the economy from an altitude of 6,000 feet.

Fiscal watchdog Maya MacGuineas has attended several of these meetings. She says it's not just the view of the Grand Tetons that makes them special.

Ms. MAYA MACGUINEAS (New America Foundation): You're hiking through the most beautiful scenery I've ever seen, talking about interest rate policy the entire time. Even when you're in the mountains and even when there's bear sightings, people are still thinking about monetary policy and how that works with the economy at large.

HORSLEY: It was in this setting last year that Fed Chairman Ben Bernanke laid the groundwork for what became known as QE2 - the Fed's unorthodox bond-buying effort designed to goose the economy's sluggish growth. The move helped rally the stock market and for a time the economy as a whole seemed to be on the mend.

MacGuineas, who heads the Committee for a Responsible Federal Budget, says some are looking for an encore this year.

Ms. MACGUINEAS: The build-up is tremendous because we all recognize what an important moment it is right now in time, so all eyes will be on Chairman Bernanke when he makes his speech this morning.

HORSLEY: Expectations are high, precisely because the economy has been laid so low. Hiring has slowed sharply since the beginning of the year. Manufacturing appears to be losing steam. And economists like Nariman Behravesh of IHS Global Insight are dialing back their growth forecasts for this year and next.

Mr. NARIMAN BEHARAVESH (IHS Global Insight): When growth is so weak and the economy is almost at stall speed, if you will, it's not going to take much to knock us down. And it's that kind of a vulnerability to shock that has us quite concerned.

HORSLEY: Behravesh thinks Bernanke is worried too. The Fed's already set short-term interest rates about as low as they can go, and said it's likely to keep them there for two more years. While Behravesh does not expect any big announcement from the Fed chairman today, he does think Bernanke will leave the door open for additional steps if necessary.

Mr. BEHARAVESH: The Fed has been the firefighter of last resort and if it is indeed sort of running out of powerful weapons, then more of the burden should fall on fiscal policy. But of course the worry is that Congress and the president will punt somehow or make a mistake. Just given what we went through with the raising of the debt ceiling limit, the risks are very high that they could blow it.

HORSLEY: President Obama is expected to outline his own plans to boost hiring early next month. But he's likely to meet resistance from Congressional Republicans for any proposal that involves new government spending. That political stalemate leaves a vacuum that some want the Fed to help fill. There are small steps the Fed could take, to drive long-term interest rates even lower, for example, or discourage banks from hoarding cash.

But Mohamed El-Erian, who runs the giant PIMCO bond fund, says these moves would come at a price, and Bernanke knows it.

Mr. MOHAMED EL-ERIAN (PIMCO): He's been very clear about this, saying that over time the benefits are going down and the expected costs and risks are going up, including political and reputational risk. And that's one thing that the Fed always worries about, because the autonomy of the Fed is critical to good economic policy management.

HORSLEY: Bernanke has already drawn criticism from Republican presidential hopefuls Rick Perry and Ron Paul. And with inflation inching up, some of the central bank's own leaders are also voicing concern that the Fed may be going too far.

Ultimately, El-Erian says, President Obama and Congress need to put their differences aside and tackle the country's most serious economic challenges.

Mr. EL-ERIAN: The best that the Fed can do is buy some time for the other agencies to wake up. It can provide a bridge. But if the other agencies do not wake up, it will be a bridge to nowhere.

HORSLEY: He's hoping Bernanke's speech today serves as a warm-up and a wake-up for the nation's other would-be economic leaders.

Scott Horsley, NPR News, Jackson Hole, Wyoming.

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