June 19, 2013
Chairman says Fed to act as needed but mindful of risks
Federal Reserve Chairman Ben Bernanke said today progress in bringing down US unemployment was too slow and the central bank would act as needed to strengthen the economic recovery.
However, in a speech that suggested the Fed chief is taking seriously concerns about the possible effects of unconventional monetary policy, Bernanke did not explicitly signal any monetary easing was imminent.
"It is important to achieve further progress, particularly in the labor market," Bernanke said at the Kansas City Fed's annual Jackson Hole symposium. "Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."
Bernanke downplayed the potential risks from the Fed's unconventional policies and argued that the asset purchases had been quite effective at boosting economic growth and fostering job creation. But he also stressed that the Fed was well aware of the risks of operating in uncharted territory.
In response to the financial crisis and recession of 2007-2009, the Fed cut official rates to zero and bought some $2.3 trillion in government and mortgage securities.