Fed chief pledges more aid
Bernanke defends actions, says other means available
8/25/2012WASHINGTON — 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.
Mr. Bernanke also defends steps the Fed has already taken. "There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery," Mr. Bernanke says in the letter, which responds to questions posed by California Rep. Darrell Issa, a Republican.
Mr. Issa is chairman of the House Committee on Oversight and Government Reform.
Mr. Bernanke notes in the letter that with interest rates already at record lows, the Fed has had to deploy other means to strengthen the economy, such as buying Treasury bonds. The goal of the bond purchases has been to lower rates to encourage borrowing and spending.
The bond purchases "have helped to promote a stronger recovery than otherwise would have occurred," Mr. Bernanke wrote in the letter.
Stocks reversed their losses Friday after the letter was reported by the Wall Street Journal.
The Dow Jones industrial average was down 30 points at its low but finished 100.51 points higher, at 13,157.97, its first gain all week. The blue-chip index posted its first losing week since early July.
The Standard & Poor's 500 index rose 9.05 to 1,411.13 but snapped a six-week winning streak for the week. The Nasdaq composite index rose 16.39 to 3,069.79, ending five straight weeks of gains.