Bernanke: Fed Ready to Act if Economy Worsens

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Federal Reserve Chairman Ben Bernanke said that the Fed is prepared to respond if the country's economy shows more signs of faltering.

Testifying before the House Financial Services Committee Wednesday, Bernanke said the Fed has several options at its disposal, including keeping interest rates low and buying more bonds.  
    
He predicted the economy will strengthen in the second half of this year but left the door open to further economic stimulus.

"The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying a need for additional policy support," Bernanke said.

"We have to keep all the options on the table. We don't know where the economy is going to go," he  told lawmakers.
    
The Fed chairman said sagging home prices, hard-to-get loans, and high unemployment pose long term obstacles to growth.

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