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.
- 1 East 17 bandmember Brian Harvey in 'very desperate situation’
- 2 Is this bridge haunted by the ghost of nu rave?
- 3 Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
- 4 The West has it totally wrong on Lee Kuan Yew
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
East 17 bandmember Brian Harvey in 'very desperate situation’
Vladimir Putin says Russia will fight for the right of Palestinians to their own state
Is this bridge haunted by the ghost of nu rave?
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
Saudi Arabia says it won't rule out building nuclear weapons
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
The West has it totally wrong on Lee Kuan Yew
Revealed: Putin's army of pro-Kremlin bloggers
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...