Aug 31, 2012
U.S. Federal Reserve chairman Ben Bernanke again pledged Friday that the Fed stood ready to provide more help to the beleaguered American economy. But he stopped short of committing to any immediate move.
In a closely-watched speech at a symposium of central bankers in Jackson Hole, Wyo., Bernanke said the Fed “should not rule out” new policies to boost hiring. But he noted that intervention carried risks.
Bernanke’s speech painted a bleak picture of the U.S. jobs market and economy, saying they were “far from satisfactory.” He said the U.S. unemployment rate — currently at 8.3 per cent — was of “grave concern.”
“It is important to achieve further progress, particularly in the labour market,” he said.
Bernanke said the U.S. economy still has a long way to go before it’s back to full health. The most recent GDP report released earlier this week showed annualized growth of just 1.7 per cent.
“We have seen no net improvement in the unemployment rate since January,” he said.
“Unless the economy begins to grow more quickly than it has recently, the unemployment rate is likely to remain far above levels consistent with maximum employment for some time.”
The most dramatic stimulus tool the Fed has left in its arsenal would be another round of bond buying to try to lower long-term interest rates.
Bernanke cited studies that said the Fed’s two previous rounds of bond-buying created at least two million jobs.