Bernanke Says Feds Considering Further Stimulus
Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank is considering additional stimulus.
Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank was ready to offer the economy additional stimulus after it announced it would likely keep interest rates near zero until at least late 2014.
The Fed also took the historic step of adopting an explicit inflation target, though Bernanke took pains to stress that officials would be flexible about reining in price growth when unemployment was too high.
The late 2014 timeframe for the first rate hike was considerably later than investors had expected and some 18 months later than the Fed had suggested last year, and the announcement prompted a rally in U.S. government bonds.
Speaking at a news conference after a two-day policy meeting, Bernanke was cautious about recent improvements in the U.S. economy, and he left the door open to further Fed bond purchases.
“I don’t think we’re ready to declare that we’ve entered a new, stronger phase at this point,” Bernanke said. “If the situation continues with inflation below target and unemployment declining at a rate which is very, very slow, then … the logic of our framework says we should be looking for ways to do more.”