US Fed pledges more support for economy
Federal Reserve chairman Ben Bernanke delivers accommodative speech.
US Federal Reserve chairman Ben Bernanke has said the central bank will provide “additional policy accommodation” to help boost economic growth in the world’s largest economy.
The chairman said the Fed had acted over the past five years to support the economy, and suggested it would do the same again if needed - however he stopped short of outlining any specific action.
“Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labour market conditions in a context of price stability,” he said.
He added: “We have seen little evidence thus far of unsafe buildups of risk or leverage, but we will continue both our careful oversight and the implementation of financial regulatory reforms aimed at reducing systemic risk.”
Mr Bernanke highlighted unemployment as an issue for the economy - the issue perhaps being one of the main drivers of the Fed’s statement of support.
“The unemployment rate remains more than 2 percentage points above what most FOMC participants see as its longer-run normal value, and other indicators - such as the labour force participation rate and the number of people working part time for economic reasons - confirm that labour force utilisation remains at very low levels.”
Mr Bernanke said there had been “no net improvement in the unemployment rate since January.
“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,” he added.
Mr Bernanke also highlighted progress being made in Europe and called recent policy proposals “quite constructive” and said he would “urge” Europe to press ahead with the policy initiatives to resolve the crisis.