WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke on Monday said the central bank will monitor the sliding U.S. dollar but pledged anew to keep interest rates at record-lows to nurture the economic recovery.
In remarks to the Economic Club of New York, Bernanke engaged in a delicate dance.
He made clear that Fed policymakers will keep rates at super-low levels. Yet through his words, Bernanke is also trying to bolster confidence in the dollar without actually raising rates, a move that could short-circuit the fragile recovery.
Low interest rates could put additional downward pressure on the dollar. And economists say a free-fall in the value of the dollar, while unlikely, can't be entirely dismissed. Still, low rates are needed to encourage consumers and businesses to spend more and fuel the economic rebound.
That's the dilemma for the Fed.
"We are attentive to the implications of changes in the value of the dollar," Bernanke said in rare remarks about the greenback. The Fed, he said, will continue to "monitor these developments closely."
Commodity prices -- such as oil -- have risen lately. That pickup likely reflects a revival in global economic activity and the recent depreciation of the dollar, Bernanke said.
