Bernanke says there’s room for Fed to act further to bolster recovery; defends actions

WASHINGTON – Federal Reserve Chairman Ben Bernanke makes clear in a letter to a House lawmaker that he thinks the Fed can do more to bolster the economic recovery and help reduce unemployment.

Bernanke also defends actions the Fed has already taken.

“There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery,” Bernanke says in the letter.

He notes that with interest rates already at record lows, the Fed has had to deploy other means to strengthen the economy, such as buying bonds.

At its last meeting, the Fed signalled a growing inclination to act further to help the economy.

Stocks reversed their losses after the letter to California Rep. Darrell Issa, a Republican, was reported by The Wall Street Journal.