WASHINGTON (MNI) – The following is an excerpt from Federal Reserve
Chairman Ben Bernanke’s comments Wednesday during a press conference
following the FOMC policy decision announcement:
Question:
Mr. Chairman, what is the extended period right now for
exceptionally low Fed funds rates, given recent developments in the U.S.
and global economic picture? Is it a year or two? Under what conditions
would the extended period, be extended even longer?
Bernanke:
Well the reason we use extended period is not to be intentionally
opaque, the reason is that we don’t know exactly how long. I think the
thrust of extended period is that we believe we’re at least two or three
meetings away from taking any further action, and I emphasize “at
least.”
But depending on how the economy evolves and inflation and
unemployment, it could be significantly longer. It will depend on how
the economic outlook changes. If we do get both improved job creation
and inflation close to our or even above our mandate consistent level
then that would be a sign that we need to consider beginning an exit
process. But we’re not there at this point.
(…)
We have chosen not to give a time frame because, again, it’s our
intention to monitor the economy, revise our outlook — we’ve revised it
significantly since April — and make a judgment based on the incoming
data. So we don’t want to necessarily commit ourselves to a fixed time
frame.
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$,MT$$$$]
