The chairman of the Federal Reserve spoke to Congress on Wednesday, and his tone was grave and cautious.
He warned that the future of the U.S. economy appeared “unusually uncertain” and committed the Fed to taking further actions if necessary to push recovery.
The chairman also laid out some steps that the central bank might take if the economy tanks. The first plan of action would change the language – in an unspecified way – that the Fed uses to commit to its interest rate goals. Currently, the target rate is between 0 and 25 basis points.
In the second plan, the Fed would cut the interest it pays to banks on their extra reserves. The third possibility would entail quantitative easing – essentially, buying more assets with freshly-printed dollars to try to get the system moving again.
Competing fears of economic stagnation and runaway inflation battered the dollar. That buoyed gold futures, which rose $3.30 to $1,195.10 per troy ounce.
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