Bernanke: Fed committed to easy policy for as long as needed

Wed Nov 20, 2013 11:06am EST
 
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By Alister Bull

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Tuesday the Fed will maintain ultra-easy U.S. monetary policy for as long as needed and will only begin to taper bond buying once it is assured that labor market improvements would continue.

In a speech to the National Economists Club that echoed dovish comments by his nominated successor, Janet Yellen, Bernanke also said that while the economy had made significant progress, it was still far from where officials wanted it to be.

"The FOMC remains committed to maintaining highly accommodative policies for as long as they are needed," he said in prepared remarks, referring to the policy-setting Federal Open Market Committee.

"I agree with the sentiment, expressed by my colleague Janet Yellen at her testimony last week, that the surest path to a more normal approach to monetary policy is to do all we can today to promote a more robust recovery," he said.

President Barack Obama nominated Yellen, the Fed's current vice chair, to replace Bernanke when his terms ends on January 31.

The Senate Banking Committee, which held a hearing for Yellen last week, will vote on her nomination on Thursday to pass it to the full Senate for consideration. She is expected to win confirmation with relative ease.

The Fed has held interest rates near zero since late 2008 and quadrupled its balance sheet to $3.9 trillion through three massive rounds of bond buying.

It decided in October to maintain asset purchases at an $85 billion monthly pace. Bernanke, in remarks likely to reinforce expectations the Fed will not taper until next year, said officials want evidence of durable job growth before scaling back buying.   Continued...

 
U.S. Federal Reserve Chairman Ben Bernanke sits for an onstage interview at the National Economists Club annual dinner at the U.S. Chamber of Commerce in Washington, November 19, 2013. REUTERS/Jonathan Ernst