Saturday 24 March 2018

No new stimulus in Bernanke’s eagerly-awaited speech

Ben Bernanke. Photo: Reuters
Ben Bernanke. Photo: Reuters

US Federal Reserve chairman Ben Bernanke offered no new stimulus in a much anticipated speech today.

There had been talk that Mr Bernanke might announce a third round of QE, quantitative easing.

Bernanke said the US government needed to act to boost jobs.

He said policies to strengthen growth were mostly ‘'outside the province of the central bank'’.

Speaking to central bankers - including ECB boss Jean-Claude Trichet – in Wyoming, he said that US second-half growth should improve.

He added that shocks in recent years had not permanently altered the country's potential.

Mr. Bernanke claimed that while record-low interest rates will promote growth over time, the weak US economy requires further help in the short run.

And he warned that a repeat of this year's political battle over the debt and deficit could ‘'seriously jeopardise’' the recovery.

He had a word for Europe too. He told M. Trichet: 'I have confidence that our European colleagues fully appreciate what is at stake in the difficult issues they are now confronting and that, over time, they will take all necessary and appropriate steps to address those issues effectively and comprehensively.'

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