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Bernanke hints at more US fiscal stimulus

Fed chairman suggests more asset purchases, but ponders its efficacy

LONDON (SHARECAST) – Federal Reserve chairman Ben Bernanke says that the US may need further fiscal stimulus measures, which could begin in November.

“There would appear…to be a case for further action”, Bernanke is reported to have said at a Boston meeting of the Fed’s top people.

“It seems likely that inflation trends will remain subdued for some time,” he said. The annual inflation rate has stuck at 1.1 percent this month, in line with forecasts following a smaller than expected increase of 0.1 percent in September.

Bernanke suggests the central bank could increase asset purchases but warns that it is unclear how effective this form of stimulus will be. Opponents believe it an ineffective method of boosting the economy.

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