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WASHINGTON (AP) -- Turmoil in financial markets has eased somewhat, but the situation is still ''far from normal,'' Federal Reserve Chairman Ben Bernanke said Tuesday.

The central bank has taken a number of unconventional steps -- especially since March, when the credit crisis intensified -- to help squeezed banks and big investment firms overcome problems and try to get credit flowing more freely again.

Those efforts appear to be paying off and ''have contributed to some improvement in financing markets,'' the Fed chief said in prepared remarks delivered via satellite to a financial markets conference sponsored by the Federal Reserve Bank of Atlanta in Sea Island, Ga.

Bernanke noted some improvements in the markets for certain mortgage-backed securities, such as those backed by Fannie Mae and Freddie Mac, as well as some fixed-rate mortgages and corporate debt.

Moreover, the Fed's extraordinary decision in March to let investment firms go to the Fed for emergency loans ''seems to have bolstered confidence,'' Bernanke said.

''These are welcome signs, of course, but at this stage conditions in financial markets are still far from normal,'' he said.

For instance, there are still strains involving a widely used interest rate called the London interbank offered rate, or Libor, Bernanke said. And ''funding pressures'' have also been evident in the ''strong participation'' of commercial banks in a Fed auction program that has made billions of dollars available in short-term cash loans, he said.

Bernanke said the Fed policymakers ''stand ready'' to further increase the size of these loans in the future if warranted by financial developments.

Janet Yellen, president of the Federal Reserve Bank of San Francisco, in another speech Tuesday, offered a similar assessment of financial conditions. ''There are some rays of hope that the strains may be easing a bit,'' she said. The Fed's efforts, she said, ''have mitigated the worst effects of the credit crunch. But they have not resolved it. Indeed, my sense is that the process of resolution will unfold only gradually,'' Yellen added.

On Wall Street, a weak retail-sales report pulled stocks lower. The Dow Jones industrials closed down 44.13 points.

In his speech, Bernanke did not talk about the Fed's next move on interest rates or the broader state of the U.S. economy, which many fear is on the edge of a recession or in one already.

To bolster the economy, the Fed last month cut a key interest rate by one-quarter percentage point to 2 percent. At the same time, policymakers indicated that their rate-cutting campaign, which started in September, could be drawing to a close.

Yellen called the current level of interest rates ''appropriate.''

Many economists believe the Fed will focus more on its various efforts to relieve stressed credit markets.

After a run on Bear Stearns pushed the nation's fifth-largest investment bank to the brink of bankruptcy in March, fears grew that others might be in jeopardy, given major stresses in credit and financial markets at that time.

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