Bernanke Signals that Fed is Ready to Act if Necessary (SPY)

Speaking from Jackson Hole, Wyoming Friday, Federal Reserve Chairman Ben Bernanke said that the central bank is willing to act if the economy weakens. Mr. Bernanke said that he believes second half growth will continue, "albeit at a relatively modest pace." According to a New York Times report, "To help sustain the economy, Mr. Bernanke gave his strongest indication yet that the Fed was ready to resume its large purchases of longer-term debt if the economy worsened, a move that would add to the Fed’s already substantial holdings." "I believe that additional purchases of longer-term securities, should the F.O.M.C. choose to take them, would be effective in further easing financial conditions,” Mr. Bernanke told a Fed policy symposium. "We have come a long way, but there is still some way to travel," Mr. Bernanke said. “Stronger household finances, rising incomes, and some easing of credit conditions will provide the basis for more-rapid growth in household spending next year,” Mr. Bernanke said. Mr. Bernanke offered a caveat, however. “Central bankers alone cannot solve the world’s economic problems,” he said. The SPDR S&P 500 ETF

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