U.S. Federal Reserve Chairman Ben Bernanke has kept the door open to further interest rate cuts.

“We will not stand down until we have achieved our goals of repairing and reforming our financial system and restoring prosperity,” Bernanke said in prepared remarks to the Economic Club of New York on Wednesday.

The remarks came one week after a joint rate cut involving the Fed and other major central banks to stem the credit crisis.

“We will continue to use all the tools at our disposal to improve market functioning and liquidity, to reduce pressures in key credit and funding markets, and to complement the steps the Treasury and foreign governments will be taking to strengthen the financial system,” Bernanke said.

Bernanke stressed that policymakers now have the tools they need to address the credit crunch. And he expressed confidence that the U.S. “will emerge from this period with renewed vigor.”

But “credit markets will take some time to unfreeze,” he said, and “even if they stabilize…broader economic recovery will not happen right away.”

“Beige Book” suggest broad weakness

Meanwhile, economic activity weakened across all 12 Federal Reserve districts in September, according to a report released today.

The report shows that regions across the U.S. have taken on a more pessimistic view about the economic outlook.

Most of the Fed’s 12 regional banks reported that manufacturing has slowed and consumer spending has decreased.

Meanwhile, U.S. households and businesses are facing even tighter credit conditions.

“Credit conditions were characterized as being tight across the 12 districts, with several reporting reduced credit availability for both financial and non-financial institutions,” the so-called “Beige Book” said.

In one piece of good news, the report noted that most of its 12 districts reported that cost pressures on prices had eased.

IE