WASHINGTON - The U.S. Federal Reserve took a step toward setting a target for inflation on Wednesday as Chairman Ben Bernanke said the central bank would issue longer-range projections on how it expects the economy to perform.

In a speech prepared for delivery at the National Press Club, Bernanke said minutes from the most recent meeting of the policy-setting Federal Open Market Committee, set for release later on Wednesday, would include projections that would offer a view on how the Fed expects the economy to perform beyond the central bank's normal three-year forecast horizon.

The longer-term projections of inflation may be interpreted ... as the rate of inflation that FOMC participants see as most consistent with the dual mandate given to it by Congress -- that is the rate of inflation that promotes maximum sustainable employment while also delivering reasonable price stability, Bernanke said.

He said the long-run projections should help anchor the public's expectations about the future path of inflation in a way that could help prevent a self-feeding inflationary, or deflationary, psychology.

Bernanke said aggressive steps the Fed had taken to combat the financial crisis were paying off. He acknowledged concerns that the Fed's lending programs, which have more than doubled its balance sheet to about $2 trillion, exposed taxpayer money to greater risk, but said the central bank had acted appropriately to limit potential losses.

(Reporting by Mark Felsenthal, Emily Kaiser and Alister Bull, Editing by Chizu Nomiyama)

Ben Bernanke Inflation Target