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Ben Bernanke is struggling to build consensus among Federal Reserve officials about what steps are needed – if any – to give the economy a boost.
It showed in a speech the Fed chairman delivered Friday that carried a mixed message: He sees the economy improving next year, but he stands ready to take bold action if it falters.
Bernanke acknowledged the economy is fragile, especially after the government just reported the weakest quarterly growth in a year. And he said high unemployment poses a serious threat. Still, Bernanke remained optimistic enough to repeat the Fed's forecast for some pickup in growth in 2011 and beyond.
The Fed chairman's colleagues have more latitude to speak their minds bluntly, and many have done so recently.
Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, says keeping interest rates at record lows is a "dangerous gamble" that could unleash inflation or new speculative bubbles in the prices of financial assets.