Fed committed to stimulus after tapering: Bernanke

Bernanke said central bank has the tools including adjusting the rate on excess bank reserves.

Written by Reuters | New York | Published:January 5, 2014 2:36 am

The US Federal Reserve is no less committed to highly accommodative policy now that it has trimmed its bond-buying stimulus,Ben Bernanke said on Friday in what could be his last speech as Fed chairman.

Bernanke,who steps down as head of the US central bank at month’s end,gave an upbeat assessment of the US economy in coming quarters. But he tempered the positive signs in the housing sector,financial markets and fiscal policies by repeating that the overall recovery “clearly remains incomplete” in the United States.

But that decision “did not indicate any diminution of (the Fed’s) commitment to maintain a highly accommodative monetary policy for as long as needed,” Bernanke said at an American Economic Association forum in a snow-swept Philadelphia.

Looking into the years ahead,Bernanke said the central bank has the tools — including adjusting the rate on excess bank reserves and so-called reverse repurchase agreements,or repos — to return to a normal policy stance without resorting to asset sales.

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