There was further bad news on Friday with the release of updated figures for economic output in the second quarter, with growth at an annualised rate revised down from 2.4 per cent to 1.6 per cent.
“The issue at this stage is not whether we have the tools to help support economic activity and guard against disinflation. We do,” Mr Bernanke said in a speech at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming.
The only issue, he said, is whether “the benefits of each tool, in terms of additional stimulus, outweigh the associated costs or risks of using the tool”. Mr Bernanke said that the Fed was ready to act “especially if the outlook were to deteriorate significantly”.