Mr. Bernanke said the central bank is prepared to take additional actions, referring to a possible third round of bond buying. Two now-expired programs of Fed bond purchases were intended to push down long-term interest rates to encourage borrowing and spending.
The Fed chairman’s comments came at a news conference after a two-day policy meeting. It was his fifth such news conference, a practice he started a year ago as a way to make the Fed’s policy deliberations more open.
He said the weaknesses in the economy, including unemployment that remains historically high at 8.2 percent, will help keep inflation “close to or a bit below” the Fed’s 2 percent target.
The Fed’s updated forecast stuck with its expectation that it will leave its key policy lever, the federal funds rate, at a record low until at least late 2014.
The funds rate has been at that level since December 2008, as part of the Fed’s aggressive efforts to combat a deep recession and, since June 2009, a sluggish recovery.
Mr. Bernanke did not answer specifically when asked what his own expectation was for the first increase in the funds rate. A new forecast showed that six Fed officials expect rate increases in 2012 or 2013, but 11 members of the Fed policy group don’t expect a Fed rate increase until 2014 or 2014.
On Europe, Mr. Bernanke said he believed the Continent’s leaders had made “substantial progress overall” in dealing with the region’s debt crisis, but he said “more work” needs to be done.
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