USA: Federal Reserve Chairman Ben Bernanke says the central bank will "do all that it can to help restore high rates of growth and employment in a context of price stability."

Record ID: 751664

  • Title: USA: Federal Reserve Chairman Ben Bernanke says the central bank will "do all that it can to help restore high rates of growth and employment in a context of price stability."
  • Date: 9th September 2011
  • Summary: MINNEAPOLIS, MINNESOTA, UNITED STATES (SEPTEMBER 8, 2011) (REUTERS) FEDERAL RESERVE CHAIRMAN BEN BERNANKE WALKING TO PODIUM CUTAWAY AUDIENCE (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN BEN BERNANKE, SAYING: "Economic policymakers face a range of difficult decisions, and every household and business must cope with the stresses and uncertainties that our current situation presents. These are not easy tasks. I have no doubt, however, that these challenges can be met, and that the fundamental strengths of our economy will ultimately reassert themselves. Let me assure you that the Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a context of price stability." CUTAWAY AUDIENCE (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN BEN BERNANKE, SAYING: "However, inflation is expected to moderate in coming quarters as these transitory influences wane. In particular, the prices of oil and many other commodities have either leveled off or have come down from their highs. Meanwhile, the step-up in automobile production should reduce pressure on car prices. Importantly, we see little indication that the higher rate of inflation experienced so far this year has become ingrained in the economy. Longer-term inflation expectations have remained stable according to the indicators that we monitor, such as the measure of households' longer-term expectations from the Michigan survey, the 10-year inflation projections of professional forecasters, and the five-year-forward measure of inflation compensation derived from the yields of inflation-protected Treasury securities." WIDESHOT AUDIENCE (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN BEN BERNANKE, SAYING: "Other factors also may restrain growth in coming quarters. For example, state and local governments continue to tighten their belts by cutting spending and reducing payrolls in the face of ongoing budgetary pressures, and federal fiscal stimulus is being withdrawn. There is ample room for debate about the appropriate size and role for the government in the longer run, but--in the absence of adequate demand from the private sector--a substantial fiscal consolidation in the shorter term could add to the headwinds facing economic growth and hiring." CUTAWAY MAN STANDING IN AUDIENCE BERNANKE WALKING FROM PODIUM
  • Embargoed: 24th September 2011 13:00
  • Keywords:
  • Location: Usa, Usa
  • Country: USA
  • Topics: Economy
  • Reuters ID: LVA34CN2JYZ8O6GBKLW1WJ56PCHC
  • Story Text: Federal Reserve Chairman Ben Bernanke on Thursday (September 8) said the U.S. central bank would spare no effort to boost disappointingly weak growth and lower unemployment, and he downplayed concerns about inflation.
    While the Fed chairman did little to disturb expectations of a further easing of monetary policy when officials meets on Sept. 20-21, he offered no details of steps the Fed might take, disappointing some investors.
    "The Federal Reserve will certainly do all it can to help restore high rates of growth and employment in a context of price stability," Bernanke told the Economic Club of Minnesota.
    In what could be taken as a bid to quell concerns among some of his colleagues that a further monetary easing could spark inflation, Bernanke said a rise in prices this year would likely to be transitory.
    "We see little indication that the higher rate of inflation experienced so far this year has become ingrained in the economy," he said.
    U.S. stocks fell, the dollar extended gains against the euro and Treasury debt prices rose on Bernanke's comments.
    A widening debt crisis in Europe and collapse in consumer and business confidence in the United States has raised concern the U.S. and global economies could slide back into recession.
    So stark is the recent deterioration in the global economic recovery that the political debate in Washington has veered in only six weeks from a preoccupation with how to cut U.S. debts to a renewed urgency on lowering unemployment.
    President Barack Obama is scheduled to lay out a jobs package worth more than $300 billion later on Thursday, and job creation was a key theme for Republican presidential hopefuls at a debate late on Wednesday.
    Other than offering a bit more detail on the outlook for inflation and emphasizing that sluggish growth is not enough to satisfy the Fed, Bernanke offered few fresh insights into thinking at the central bank on measures to aid the recovery.
    He largely reiterated remarks he made two weeks ago, repeating that the Fed has a range of tools to provide additional stimulus and is prepared to use them.
    Unusually weak household spending and persistent financial strains spurred by worry over Europe's sovereign debt crisis and the loss of Washington's top-tier credit rating continue to hold back the recovery, Bernanke said.
    The Fed chairman warned that overzealous belt-tightening by the U.S. government in the near term could also slow down the recovery.
    "Substantial fiscal consolidation in the shorter term could add to the headwinds facing economic growth and hiring," he said.
    The U.S. economy expanded at less than a 1.0 percent annual rate in the first half of the year, and looks to be doing no better now. A report on Friday showed job growth had stalled for first time in nearly a year.
    The Fed cut benchmark rates to near zero almost three years ago to pull the economy out of a sharp recession. It then bought $2.3 trillion worth of longer-term securities in two installments ending in June to boost faster growth.
    But, with confidence crumbling, the Fed on Aug. 9 eased monetary policy further by expanding on an earlier promise to hold rates at rock-bottom
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