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Bernanke: US 'close to border' of recession, Federal Reserve may intervene

Federal Reserve Chairman Ben Bernanke says that the US economic recovery is 'not far' from losing momentum. If the recovery slips further, the Federal Reserve is prepared to act again.

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Federal Reserve Chairman Ben Bernanke (l.) talks to Scott Pelley of '60 Minutes' in a library at Ohio State University in Columbus, Ohio, released on Dec. 3.

CBS/Reuters

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Undaunted by his critics, Federal Reserve Chairman Ben Bernanke says a weak economic recovery may call for more Fed action, not less.

In a televised interview, he said the key risk facing the economy is not inflation but protracted high unemployment – and the possibility that the US could even stumble back into recession.

Mr. Bernanke used the appearance as a platform to rebut critics of the Fed's plan to buy about $600 billion in bonds in an effort to pump money and confidence into the economy. Some economists say the effort isn't needed, given signs of stabilization and improving growth in the US economy. And others say the move could fuel inflation and make it even harder for the Fed to manage an "exit strategy" from its extraordinary measures to prop up the economy.

Investors have been pushing up the price of gold since the Fed's new round of bond purchases was announced. One reason, commodity analysts say, is investors' desire to own gold as hedge against heightened risks of inflation.

But in an interview that aired on CBS's "60 Minutes" Sunday night, the Fed chairman defended his policies without reservation.

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