Getting your player ready...
WASHINGTON — Federal Reserve Chairman Ben Bernanke says the central bank will be ready to tighten monetary policy and shrink its bloated balance sheet to prevent inflation once the economy improves.
Bernanke said Thursday that while the Fed continues to believe that loose monetary policy will be needed for an extended time, it must be ready to tighten policy as the recovery takes hold.
“When the economic outlook has improved sufficiently, we will be prepared to tighten the stance of monetary policy and eventually return our balance sheet to a more normal configuration,” the Fed chairman said.
Bernanke reiterated that he and his colleagues at the Fed believe that accommodative policies will be warranted for a long period.
