The U.S. Federal Reserve must take the effects of recent financial market disruptions into account in setting monetary policy and is ready to act as needed to ease their impact on the economy, Fed Chairman Ben Bernanke said today.

Meanwhile, U.S. President Bush, responding to the subprime-mortgage crisis, outlined a series of policy changes and recommendations today to help borrowers avoid default.

Bernanke’s prepared remarks to the Kansas City Fed’s annual Jackson Hole seminar suggest the central bank is set to lower rates unless short-term credit market conditions improve.

“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,” Bernanke said.

He added that The Fed “stands ready to take additional actions” to boost liquidity, and “will act as needed to limit the adverse effects on the broader economy that may arise from the disruptions in financial markets.”

Bernanke’s appearance was his first public speech since August 15 when the Fed lowered the discount rate it charges banks that borrow directly from the Fed by a half-percentage point to 5.75%.

In unveiling his plans to aid U.S. homeowners, Bush acknowledged that there have been “some excesses in the lending industry,” particularly as the rise in adjustable-rate mortgages leaves some borrowers unable to make monthly payments. Broader financial markets, he said, are in a “period of transition” as participants reassess and reprice risk.

Among the moves Bush will initiate will be an administrative change to allow the U.S. Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, to guarantee loans for delinquent borrowers.

Bush also will ask U.S. Congress to suspend, for a limited period, an Internal Revenue Service provision that penalizes borrowers who refinance the terms of their mortgage to reduce the size of the loan or who lose their homes to foreclosure.