Ben Bernanke tries to soothe nerves in jittery markets
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Wednesday 17 July 2013
US monetary policy is not on a “preset course” and a “highly accommodative” stance “is appropriate for the foreseeable future,” Ben Bernanke said, in a bid to reassure jittery markets.
Testifying before the US House of Representatives Committee on Financial Services, the chairman of the Federal Reserve said that, while the central bank still expects to begin scaling back its extraordinary stimulus measures later this year, it was flexible and might change its mind depending on the trends in economic data. The Fed currently buys $85bn (£56bn) government and mortgage bonds each month.
Referring to the Fed’s policy-setting Open Market Committee, Mr Bernanke said: “The economic outcomes that committee participants saw as most likely in their June projections involved more gains in labour markets, supported by moderate growth that picks up in the coming quarters as the restraint from fiscal policy diminishes.”
“If the data was broadly consistent with these projections, it would be appropriate to moderate the monthly pace of purchases later this year,” he added. “If the data continued to confirm economic improvement and normalising inflation, we would expect to continue to reduce the pace of purchases, ending them around mid-year.”
Mr Bernanke first outlined the timeline earlier this year, triggering sharp swings in markets around the world as investors worried about the possibility of the Fed rolling back its stimulus measures sooner than expected.
Yesterday, in what may be the last of his appearances before Congress, with most observers expecting him to step down early next year, he sought to soothe nerves by stressing that nothing was set in stone. “If the outlook for employment became relatively less favourable, if inflation didn’t move back towards 2 per cent, or if financial conditions – which have tightened recently – meant we couldn’t attain our mandated objectives, the pace of purchases could be maintained longer,” he said.
- 4 Women think Irish men are the sexiest, survey finds
- 5 Florida couple forced to register as sex offenders for having sex on public beach
Italian police 'reveal' what Jesus looked like as a young boy
Who should I vote for in the general election? Take The Independent's interactive quiz to find out which party is the right choice for you
Florida couple forced to register as sex offenders for having sex on public beach
Mysterious 'X-Files' sounds heard miles above the Earth
US gameshow gives woman in wheelchair incredibly awkward prize
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...