Bernanke: Fed Will Act As Needed to Limit Economic Fallout From Credit Mess

Federal Reserve Chairman Ben Bernanke pledged Friday that the central bank will "act as needed" to keep the credit crisis that has unhinged Wall Street from hurting the national economy.

In anxiously awaited remarks, Bernanke didn't specify what the Fed's next move will be but made clear policymakers are keeping close tabs on the problem, which has roiled markets in the United States and around the globe.

Even as Bernanke vowed Fed action, he sought to temper expectations.

"It is not the responsibility of the Federal Reserve — nor would it be appropriate — to protect lenders and investors from the consequences of their financial decisions," Bernanke said. "But developments in financial markets can have broad economic effects felt by many outside the markets, and the Federal Reserve must take those effects into account when determining policy."

President Bush, meanwhile, said the economy was strong enough to deal with turbulence in the stock markets.

Bush, speaking in the Rose Garden, said he was briefed on the situation in financial markets by Treasury Secretary Henry Paulson.

"The markets are in a period of transition as participants reassess and reprice risk," the president said. "This process has been unfolding for some time and it's going to take more time to fully play out. As it does, America's overall economy will remain strong enough to weather any turbulence."