JACKSON, WYO. - With the economy faltering, Federal Reserve Chairman Ben S. Bernanke said Friday he was prepared to take dramatic steps to boost the recovery but only if conditions get worse than he now expects.

In much-anticipated remarks, Bernanke sought to clarify the actions the Fed might take and what would trigger them - and to dispel the confusion that has resulted during his recent public silence, as other top Fed policymakers have aired dissonant views amid conflicting economic signs.

New government data released just before his speech at an economic symposium in Jackson Hole underscored how much economic momentum the nation has lost. Gross domestic product rose at only a 1.6 percent pace in the April-through-June quarter, the Commerce Department said, down from an preliminary estimate of 2.4 percent.

The reaction to Bernanke's remarks, both in financial markets and among economists who follow the Fed, was largely positive. The Standard & Poor's 500-stock index rose 1.66 percent for the day. Analysts said they now have a clearer sense of the direction of Fed policy, even though Bernanke stopped short of making any definitive promises of what is to come.

"He was completely clear and his body language emphatic, that they are willing to take more steps if the economic data justify it," said Allen Sinai, chief economist of Decision Economics, who attended the annual economic symposium sponsored by the Kansas City Fed.

Instead of pledging any particular policy course, Bernanke spelled out the options the Fed has should it look as if the recovery is petering out or a dangerous cycle of falling prices is taking hold. He said he does not expect either scenario.

With its target for short-term interest rates near zero, the Fed can no longer use its favorite tool to stimulate the recovery. That leaves policy in the realm of unconventional and untested alternatives.

For example, the Fed could buy hundreds of billions of dollars in Treasury bonds and other securities, aiming to lower long-term interest rates and keep a cycle of falling prices known as deflation from taking hold.

Other options include cutting the interest rate the Fed pays on reserves banks hold there and pledging to keep short-term rates very low for even longer than the Fed has already signaled.

But the exact impact of that and other remaining tools the Fed has are hard to predict.

"The issue at the stage is not whether we have the tools to help support economic activity and guard against disinflation," Bernanke said. "We do. . . . The issue is instead whether, at any given juncture, the benefits of each tool, in terms of additional stimulus, outweigh the associated costs or risks of using the tool."

In the case of bond purchases, for example, it is not clear that spending even $1 trillion or more would bring down interest rates much for ordinary consumers or businesses, since rates are already very low. But such an expensive bond program could fuel inflation down the road and spark worries that the Fed is "monetizing the debt," or printing money to fund large budget deficits.