Bernanke says Fed’s easy policy benefits world economy

WASHINGTON, Mon Mar 25, 2013 — Federal Reserve Chairman Ben Bernanke on Monday defended the central bank’s aggressive easing of monetary policy, saying while it was aimed at bolstering the economic recovery, it was helping other countries as well.

The Fed’s asset-purchase programs, aimed at keeping long-term borrowing costs down and spurring investment, have been criticized overseas for their adverse impact on emerging market currencies.

But the Fed chief, fresh from a grilling from Congress on the potential domestic risks of his quantitative easing measures, countered the rhetoric about “currency wars,” though he did not use the term specifically.

In prepared remarks to a group of academics in London, Bernanke said the integrated nature of the global economy meant the whole world benefits from a sturdier outlook.

“Because stronger growth in each economy confers beneficial spillovers to trading partners, these policies are not ‘beggar-thy-neighbor’ but rather are positive-sum, ‘enrich-thy-neighbor’ actions,” he said.

In response to a deep financial crisis and recession, and subsequent weak recovery, the Fed not only lowered overnight interest rates to effectively zero but bought more than $2.5 trillion in mortgage and Treasury securities.

Fed shooting for stronger jobs rebound: Bernanke

INDIANAPOLIS, Mon Oct 1, 2012 – Federal Reserve Chairman Ben Bernanke on Monday delivered a broad defense of the central bank’s controversial bond-buying stimulus plan, saying its actions are necessary to support a flagging economic recovery.

Bernanke pushed back against the accusations that the Fed’s policy is laying the groundwork for inflation in the future or enabling the government to run large budget deficits.

He said that while the country’s unusually weak economic performance had forced the Fed to resort to less conventional tools after bringing interest rates all the way down to effectively zero, the Fed’s goals of price stability and maximum sustainable employment have not changed.

“These goals mean, basically, that we would like to see as many Americans as possible who want jobs to have jobs, and that we aim to keep the rate of increase in consumer prices low and stable,” Bernanke told the Economic Club of Indiana.

He reiterated the Fed’s commitment, made at the September meeting where it announced a new, open-ended program of asset purchases, to keep a heavy dose of monetary stimulus in place even after the economic rebound appears to gain traction.

“As long as price stability is preserved, we will take care not to raise rates prematurely,” Bernanke said.

Bernanke says Fed has scope to provide more stimulus

WASHINGTON, Fri Aug 24, 2012 –The Federal Reserve has room to deliver additional monetary stimulus to boost the U.S. economy, Fed Chairman Ben Bernanke told a Congressional oversight panel in a letter.

“There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery,” Bernanke wrote to the committee’s chairman, Representative Darrell Issa, in a letter obtained by Reuters on Friday.

Bernanke at the end of next week will give a closely watched speech at an annual symposium in Jackson Hole, Wyoming, which will be closely watched for clues into the prospect of further bond-buying from the Fed.

Asked if it was too soon to consider new monetary easing steps when the Fed’s Operation Twist program aimed at lowering long-term bond yields was still in effect, Bernanke said policymakers must invariably look beyond the immediate term.

“Because monetary policy actions operate with a lag, the stance of policy must necessarily be set in light of a forecast of future performance of the economy,” Bernanke said.

Fed officials sharply revised down their forecasts for U.S. economic growth in June, and another potential round of downward revisions could come at its September meeting.

U.S. gross domestic product expanded at an annual rate of 1.5 percent in the second quarter, a level seen too weak to lead to a sustained decline in unemployment, which rose to 8.3 percent in July.

Bernanke at public forum: Fed focused ‘intently’ on job creation

FORT BLISS, Texas ― Spurring stronger growth and more robust job creation in the weak recovery are top priorities for the Federal Reserve, Chairman Ben Bernanke told a military audience at a rare public forum on Thursday.

“For a lot of people, I know, it doesn’t feel like the recession ever ended,” Bernanke said in remarks before a town hall-style meeting at which he fielded questions from an audience of 175 military personnel and family members.

Two of the Fed’s harshest critics are Texans and Republican candidates for president — Governor Rick Perry and Representative Ron Paul. Bernanke, who met troops returning from Iraq at 2:45 in the morning, used the setting to defend the central bank’s aggressive policies to promote growth and rebut charges it was recklessly spending government money.

Bernanke said the 9 percent jobless rate and record numbers of long-term unemployed Americans are serious problems preoccupying policymakers.

“We at the Federal Reserve have been focusing intently on supporting job creation. Supporting job creation is half of our marching orders, so to speak,” he said.

The Fed’s other job is to keep inflation in check. Bernanke said inflation should moderate and remain close to the Fed’s preferred level of 2 percent or a bit less for the foreseeable future.

Bernanke defended aggressive Fed policies against critics who charge the U.S. central bank has recklessly printed money without regard for the dangers of inflation or a weaker dollar.

“It is important to understand that this type of activity isn’t the same as government spending,” he said.

Public appearances by a Fed chairman are rare. Bernanke’s second-ever town-hall meeting — the last was in July 2009 — likely reflects a desire to counter critics from both political parties.

At Fort Bliss, most members of the audience were dressed in olive camouflage fatigues. Bernanke’s remarks were punctuated on occasion by the fussing and chattering of young children.

Republicans have focused on attacking the Fed’s extensive easy money policies, saying the central bank has failed to revive the economy despite cutting interest rates to near zero and buying $2.3 trillion in bonds. Some have warned the Fed against taking actions best left to fiscal policymakers.

Perry has equated the Fed’s bond buying with treason and suggested Texans might “treat him pretty ugly” if he ever went to the Lone Star State. Paul, a long-time advocate of returning to pegging the value of the dollar to gold or silver, wants to abolish the Fed.

Democrats have charged that the Fed has implemented policies benefiting Wall Street while disregarding the economic struggles of ordinary Americans. Some argue Fed policymakers should be subject to greater accountability.