Ben Bernanke has just delivered his keynote speech at Jackson Hole (which you can read in full here). As expected, the US Federal Reserve Chairman did not announce a new round of quantitative easing, alluding only to the "range of tools" that could be used to provide further monetary stimulus. A formal decision on QE3 has been delayed until the next meeting of the Federal Reserve's open market committee - the equivalent of the Bank of England's monetary policy committee - which has been scheduled for two days instead of one to allow a "fuller discussion" to take place.
At times in the speech, Bernanke appeared to suggest that the Fed had largely played its part and that it was up to the country's politicians to take the lead. In a notable rebuke to Capitol Hill, he declared that the "the country would be well served by a better process for making fiscal decisions". He warned that a repeat of the debt ceiling imbroglio could "seriously jeopardise the willingness of investors around the world to hold US financial assets or to make direct investments in job-creating US businesses."
In a bid to reassure Wall Street, Bernanke emphasised that the long-term growth potential of the US economy would not be "materially affected" by the crisis and the recession if, he stressed, "our country takes the necessary steps to secure that outcome". Earlier today, US growth in the second quarter was downgraded to an annualised rate of 1 per cent from a preliminary estimate of 1.3 per cent.
The markets, which initially suffered sharp falls, have since recovered, with the Dow Jones down just 0.02 per cent to 11,150 points. Bernanke will hope that his intervention has bought policymakers the time they need to finalise their response to this month's turbulence.