Federal Reserve Chairman Ben Bernanke thought Wednesday that the central bank is prepared to provide additional incentive if the current U.S. economic lull persists.Delivering his twice-a-year economic statement to Congress, Bernanke laid out three options the central bank would consider.
Bernanke said the Fed could launch an additional round of Treasury bond buying, the third such effort since 2009. It could cut the notice paid to banks on the reserves they hold as a way to encourage them to lend more.The Fed could also be extra explicit in spelling out just how long it planned to keep rates at record-low levels. That would give investors assurance about the Fed's efforts to carry on supporting the economy.
Stocks jumped after Bernanke signaled the Fed's willingness to take extra steps to boost the sluggish economy. The Dow Jones industrial regular rose 150 points, or 1.2 percent, in morning trading and broader index gained.