(Credit: Ted S. Warren/AP Photo)

Chairman Ben Bernanke defended the Federal Reserve's past stimulus actions in a speech on Friday morning, saying its actions "can be effective" and more of them may be on the way.

Bernanke's keynote speech at the Federal Reserve of Kansas City's Economic Symposium in Jackson Hole, Wyo. was closely watched by investors for clues of additional stimulus in the form of quantitative easing, which at its simplest level aims to increase the monetary supply after the central bank buys government securities.

Though Bernanke did not announce any new Federal Reserve policies or strategies, he made clear the central bank would be open to additional action in the future.

With interest rates, in particular the federal funds rate, near zero, many critics of the Federal Reserve say there is little it can do to further stimulate the economy.

"The key with Fed policy right now lies in preventing deflation, but the markets have already backed Bernanke into a corner, in that not executing QE3 will increase deflationary risk," said Guy LeBas, chief fixed income strategist with Janney Capital Markets.

In his speech, however, Bernanke said, "a balanced reading of the evidence supports the conclusion that central bank securities purchases have provided meaningful support to the economic recovery while mitigating deflationary risks."

Bernanke also looked back at the financial crisis, saying, "Now, with several years of experience with nontraditional policies both in the United States and in other advanced economies, we know more about how such policies work."

Bernanke said without the policies of the Fed, "the 2007-09 recession would have been deeper and the current recovery would have been slower than has actually occurred."

Whether or not investors were pleased with his speech, the markets seemed to respond positively.

The Dow Jones Industrial Average rose 0.46 percent to 13,060 in mid-day trading. The Nasdaq was up 0.3 percent to 3,058 and the S&P 500 was up 0.29 percent to 1,403.