Bernanke: Fed policy will not be tighter for 'foreseeable future'
Pete Marovich | Bloomberg | Getty Images
Ben Bernanke emphasized in his second day
of Congressional testimony that monetary policy will not be tighter for
the foreseeable future.
"We have not changed policy. We are not tightening policy," Bernanke said during the question and answer session. He added that none of what the Fed has communicated about winding down its bond purchases implies tighter policy any time soon.
Bernanke again tried to draw the distinction between paring back bond purchases and raising interest rates, implying that policy will remain accommodative even if the Fed ends quantitative easing since rates will remain near zero.
Bernanke said that with inflation below its 2 percent target and unemployment still high it intends to maintain highly accommodative policy for the foreseeable future.
In his prepared remarks, Bernanke said the Federal Reserve's efforts to boost the U.S. economy remain tied to the job market's health and inflation.
The Fed chairman, appearing before the Senate Banking Committee, repeated the message he gave Wednesday to the House Financial Services Committee.
Bernanke said there is no "preset course" for the Fed's $85 billion-a-month bond-buying program: Any change will depend on the economy's performance. He also says the Fed could hold its benchmark short-term interest rate near zero even after unemployment falls below 6.5 percent, particularly if the decline is caused by people leaving the workforce.
The Fed's low interest rate policies have spurred a stock market rally and encouraged more borrowing and spending.
Turning to fiscal policy, Bernanke told the Senate panel that it was not the central bank's place to force Congress to come to any particular outcome. He also said that monetary policy has carried the burden for economic recovery.
(Click here to track the U.S. stock market's reaction to Bernanke's testimony.)
end quote from:
http://www.cnbc.com/id/100896370
"We have not changed policy. We are not tightening policy," Bernanke said during the question and answer session. He added that none of what the Fed has communicated about winding down its bond purchases implies tighter policy any time soon.
Bernanke again tried to draw the distinction between paring back bond purchases and raising interest rates, implying that policy will remain accommodative even if the Fed ends quantitative easing since rates will remain near zero.
Bernanke said that with inflation below its 2 percent target and unemployment still high it intends to maintain highly accommodative policy for the foreseeable future.
In his prepared remarks, Bernanke said the Federal Reserve's efforts to boost the U.S. economy remain tied to the job market's health and inflation.
The Fed chairman, appearing before the Senate Banking Committee, repeated the message he gave Wednesday to the House Financial Services Committee.
Bernanke said there is no "preset course" for the Fed's $85 billion-a-month bond-buying program: Any change will depend on the economy's performance. He also says the Fed could hold its benchmark short-term interest rate near zero even after unemployment falls below 6.5 percent, particularly if the decline is caused by people leaving the workforce.
The Fed's low interest rate policies have spurred a stock market rally and encouraged more borrowing and spending.
Turning to fiscal policy, Bernanke told the Senate panel that it was not the central bank's place to force Congress to come to any particular outcome. He also said that monetary policy has carried the burden for economic recovery.
(Click here to track the U.S. stock market's reaction to Bernanke's testimony.)
end quote from:
http://www.cnbc.com/id/100896370
No comments:
Post a Comment