Tags: Bernanke | Fed | Duty | Aid Economy

Bernanke Says Fed Has Duty to Aid Economy, Doesn’t Detail How

Friday, 01 Oct 2010 08:57 AM

Federal Reserve Chairman Ben S. Bernanke said the central bank has a duty to aid the economy as U.S. unemployment holds near 10 percent without offering new details on what the Fed may do about it.

“We need to do our part to help the economy recover” and ensure job growth in the U.S., Bernanke said today in Washington at a forum with teachers hosted by the Fed. The labor market is growing “too slowly,” and the finding by an economists’ panel that the recession ended in June 2009 “doesn’t mean we’re back to normal,” he said in response to questions.

Other policy makers this week began to publicly debate the merits of a second round of unconventional monetary easing, including restarting large-scale Treasury purchases. The Fed said in a Sept. 21 statement that it was prepared to add stimulus if needed amid a slow recovery and inflation it deems below a level conducive to price stability and full employment.

“There is plenty of disagreement on the Federal Open Market Committee,” Bernanke said in the room where the FOMC meets at the Fed’s headquarters. “It may be even more the case today.” Even with the differences, “ultimately the committee finds a consensus, and we work together” to do what’s right for the country, he said.

That disagreement was on display yesterday in separate remarks by Fed officials.

Policy makers have the tools to act and should respond “vigorously, creatively, thoughtfully and persistently” to a slow recovery, Boston Fed President Eric Rosengren said yesterday in a New York speech. Philadelphia Fed President Charles Plosser said in New Jersey that the central bank risks its credibility by taking actions, such as additional securities purchases, that may fail to help the labor market.

In Between

Two other speakers, Atlanta Fed President Dennis Lockhart and Narayana Kocherlakota of the Minneapolis Fed, fell in between. Lockhart said Sept. 28 in Sewanee, Tennessee, that he hadn’t made up his mind yet on easing policy, and Kocherlakota said yesterday in London that purchases may have a “more muted effect” than the more than $1 trillion of buying through March.

Bernanke didn’t comment on the outlook for the economy or monetary policy in the seven-paragraph text of prepared remarks at the event today, which the central bank called a “town hall meeting with educators.” He took questions in person and via videoconference from teachers at regional Fed banks across the U.S.

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Federal Reserve Chairman Ben S. Bernanke said the central bank has a duty to aid the economy as U.S. unemployment holds near 10 percent without offering new details on what the Fed may do about it. We need to do our part to help the economy recover and ensure job growth...
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2010-57-01
Friday, 01 Oct 2010 08:57 AM
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