WASHINGTON (MNI) – The following are comments by Federal Reserve
Chairman Ben Bernanke during the ongoing news conference:
Question:
Mr. Chairman given your response just now, and given the Fed’s
belief that the recent uptick in inflation is transitory, why wouldn’t
the Fed consider taking more action to stimulate growth and would bond
purchases be your preference or communication tactics as someone
suggested also be on the table as you consider how to get the economy
growing again?
Bernanke:
Well there are a couple of considerations, one as I indicated
before, is that the current outlook is significantly different than what
we were facing in August of last year. We no longer have a deflation
risk, inflation at the moment is above target, we expect it to fall, but
we’re not in a deflationary position, and … the labor market has been
performing better than last year.
On top of that we have uncertainty now about how much of this
slow-down is temporary, how much is permanent, so that would also
suggest that we need a little bit of time to see what’s going to happen
and that would be useful in making policy decisions.
We will continue to look at the outlook and act as appropriately as
the news comes in and the projections change. We do have a number of
ways of acting, none of them without risk or costs.
We could, for example, do more securities purchases and structure
them in different ways, we could cut the interest on excess reserve that
we pay to banks and as was suggested by an earlier question … perhaps
even giving a fixed date to define extended period, those are ways that
we could ease further if needed but, of course, all of these things are
somewhat untested, they have their own costs, but we are prepared to
take additional action, obviously, if conditions warranted that.
** Market News International Washington Bureau: 202-371-2121 **
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