Federal Reserve Chairman Ben Bernanke on Friday said the Fed will use all tools to stabilize markets and set the stage for an economic recovery but provided no time frame for when a recovery will occur.
The Federal Reserve will make responsible use of all of its tools to stabilize financial markets and institutions, to promote the extension of credit to creditworthy borrowers, and to help build a foundation for economic recovery, Bernanke said in a speech to a conference organized by the Richmond Federal Reserve Bank.
Bernanke did not address the jump in unemployment and job losses in March reported earlier on Friday, and did not say when he expects the economy to rebound. He is not expected to take questions.
Relieving disruptions in credit markets and restoring the flow of credit to households and businesses are essential if we are to see, as I expect, the gradual resumption of sustainable economic growth, he said.
Bernanke said the Fed's use of unconventional tools to stimulate economic growth have been prudent and already helped to ease strains in the commercial paper market and pressures on money market mutual funds.
Fed lending programs have minimal credit risk, and avoid giving preference to any one class of borrowers, Bernanke said.
The U.S. central bank will be able to pull back its ample funding when conditions improve, the Fed chairman added.
We have a number of tools we can use to reduce bank reserves or increase short-term interest rates when that becomes necessary, he said.
(Reporting by Mark Felsenthal; Editing by Neil Stempleman)