The Federal Reserve still has room to boost the economy if needed, Ben Bernanke said in a written reply to Rep. Darrell Issa, released Friday.
“There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery,” Bernanke said in a letter dated August 22. Stocks moved higher Friday after the letter was first reported in the Wall Street Journal.
Issa, a Republican from California, sent a letter to Bernanke earlier this month, with 22 questions about monetary policy and financial regulation.
Bernanke’s reply defends the Fed’s actions, claiming that the central bank’s two large bond-buying sprees — known as quantitative easing — “have helped to promote a stronger recovery than otherwise would have occurred, and to forestall the possibility of a slide into deflation.”
CONTINUED at CNN Money.
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