U.S. Federal Reserve Chairman Ben S. Bernanke signaled he is ready to dig deeper into the central bank's toolbox after cutting interest rates almost as much as he can, opening the door to a shift by policymakers this month.
Bernanke said Monday he may use less conventional policies, such as buying Treasury securities, to revive the economy, because room to lower the main U.S. rate from the current 1 percent level is obviously limited. Even so, reducing the rate is certainly feasible, he said.
Policymakers may decide at their next meeting Dec. 15 and 16 on the details of carrying out such a shift, which might resemble the 2001-2006 quantitative easing strategy the Bank of Japan pursued after driving interest rates close to zero. The Fed chief's readiness to rely more on adding reserves to the banking system prompted JPMorgan Chase & Co. economist Michael Feroli to refer to him as "Bernanke-san" in a note Monday.