WASHINGTON — The Federal Reserve is prepared to take further steps to rejuvenate the economy by buying Treasury bonds but is wrestling with how big the program should be, Chairman Ben Bernanke said Friday.
Bernanke also indicated that Fed policymakers are trying to craft a plan to lift inflation from super-low levels. He made his remarks in a speech at a Fed conference in Boston.
Bernanke said the Fed must both weigh the risks of a Treasury-buying program and determine how the debt purchases should be paced. The Fed’s bond purchases would be intended to lower long-term interest rates to stimulate buying and spending and help lower unemployment. Those Treasury purchases would inject many more dollars into the financial system, but that poses a longer-term risk: high inflation.
Fed policymakers are expected to announce a Treasury-buying program at their Nov. 2-3 meeting. The Associated Press; AP photo
