Bernanke: Fed wrestles with size of aid program

WASHINGTON (AP) — The Federal Reserve is prepared to take further steps to rejuvenate the economy by buying Treasury bonds but is wrestling with how big the program should be, Chairman Ben Bernanke said Friday.

Bernanke also indicated that Fed policymakers are trying to craft a plan to lift inflation from super-low levels. He made his remarks in a speech delivered to a Fed conference in Boston.

Bernanke said the Fed must weigh the risks of a Treasury-buying program and determine how the debt purchases would be paced. The Fed's bond purchases would be intended to lower long-term interest rates to stimulate buying and spending and help lower unemployment.

Fed policymakers are widely expected to announce a Treasury buying program at their next meeting Nov. 2-3.

"There would appear — all else being equal — to be a case for further action," Bernanke said.

World stocks rose after Bernanke's remarks. But the prospect of more dollars swirling around the financial system did nothing to help the dollar itself, which slid further after the Fed chief spoke.

The economy is growing at a pace "less vigorous than we would like," Bernanke acknowledged.

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