Federal Reserve Chairman Ben Bernanke said at a Board of Governors conference that the central bank will tighten monetary policy when the economic outlook "has improved sufficiently." "My colleagues at the Federal Reserve and I believe that accommodative policies will likely be warranted for an extended period," Bernanke said. "At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road." Meanwhile, the Fed is testing ways to drain cash from the system, including using "reverse repos." The central bank is also considering using clearing banks to access money-market funds.
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