clear
Thursday May 26th, 2016 8:44AM

Bernanke: With unemployment high, Fed can do more

By The Associated Press
JACKSON HOLE, Wyo. - Chairman Ben Bernanke made clear Friday that the Federal Reserve will do more to boost the economy because of high U.S. unemployment and an economic recovery that remains "far from satisfactory."

He also argued that the Fed's moves so far to keep interest rates at record lows and encourage borrowing and spending have helped bolster the economy.

Bernanke stopped short of committing the Fed to any specific move, such as another round of bond purchases to lower long-term rates. But in a speech at an annual Fed conference in Jackson Hole, Wyo., Bernanke said that even with rates at super-lows, the Fed can do more.

He noted that further action carries risks but says the Fed can manage them. The Fed "should not rule out" new policies to improve the job market, Bernanke says.

Bernanke defended Fed actions so far to stimulate the economy. He cites studies showing the Fed's first two rounds of bond purchases created at least 2 million jobs.

"It is important to achieve further progress, particularly in the labor market," Bernanke said. "The Federal Reserve will provide additional policy accommodation as needed."

The U.S. economy is again struggling to grow. It expanded at a tepid 1.7 percent annual rate in the April-June quarter, the government estimated Wednesday.

Hopes for further Fed action rose last week when the central bank released minutes of its July 31-Aug. 1 meeting. It showed that officials spoke with increased urgency about the need to provide more help for the U.S. economy.

The Fed's policy committee decided that action "would likely be warranted fairly soon" unless it saw evidence of "a substantial and sustainable strengthening" of the economy. The comment raised expectations that the Fed could announce a move as soon as its next meeting Sept. 12-13.

Some analysts have cautioned that slightly brighter economic news since then may diminish the need for immediate Fed action. The economy created 163,000 jobs in July, the best burst of hiring since February. And Americans stepped up spending last month after earning a little more.

The most dramatic tool the Fed has left in its arsenal would be another round of bond buying, to try to lower long-term interest rates.

Still, Bernanke's comments made clear that the economy has a long way back to full health.

"Unless the economy begins to grow more quickly than it has recently, the unemployment rate is likely to remain far above levels consistent with maximum employment for some time," he said.

At the end of every August, economists and central bankers convene in the Rocky Mountains at a symposium organized by the Federal Reserve Bank of Kansas City. They present papers and argue about economic issues. But mostly, they wait to see what the Fed chairman has to say.

In August 2010, Bernanke hinted during his remarks at Jackson Hole that the Fed might begin a second round of bond purchases, a policy called quantitative easing, or QE2. The Fed started buying bonds three months later.

Many analysts think a third round of bond purchases - QE3 - would include both Treasurys and mortgage-backed securities.
© Copyright 2016 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Doctors: Blood clot located in Clinton's head
Secretary of State Hillary Rodham Clinton developed a blood clot in her head but did not suffer a stroke or neurological damage, her doctors said Monday. They say they are confident that she will make a full recovery.
3:55PM ( 3 years ago )
Illinois Sen. Kirk to return a year after stroke
Nearly a year after a stroke left him barely able to move the left side of his body, U.S. Sen. Mark Kirk is expected to climb the 45 steps to the Senate's front door this week - a walk that's significant not just for Illinois' junior senator, but also for medical researchers and hundreds of thousands of stroke patients.
3:54PM ( 3 years ago )
U.S. News
Ga. ethics legislation could end free tickets
General Assembly approval next year of a proposed ethics reform measure could endanger an important fall tradition for Georgia lawmakers - free football tickets.
6:26PM ( 3 years ago )
Abortion restrictions, tax changes loom in Ga.
Tax breaks for manufacturers and higher unemployment taxes for employers take effect with the new year in Georgia, but it remains to be seen whether the state's newest abortion restrictions will be enforced.
6:23PM ( 3 years ago )
Business News
Couch names administrative team
Ahead of his scheduled swearing in Friday, Hall County Sheriff-elect Gerald Couch named his top administrative team Monday.
6:28PM ( 3 years ago )
Tech beats Southern California in Sun Bowl
Tevin Washington threw a touchdown pass and ran for another score to help Georgia Tech beat Southern California 21-7 on Monday in the Sun Bowl.
5:54PM ( 3 years ago )
Hall Co. officials launch health-based initiative for employees
Hall County officials believe healthy county employees will be of greater service to the county. With that in mind, they have created a health-based fitness initiative to provide free fitness training for county workers.
5:46PM ( 3 years ago )
Local/State News
Gainesville metro once again boasts lowest unemployment rate in Georgia
The Georgia Department of Labor announced Thursday morning that Metro Gainesville’s unemployment rate for April was 4.2 percent, down three-tenths of a percentage point from 4.5 percent in March.
By AccessWDUN staff
7:00AM ( 1 hour ago )
UPDATE: 11 states - including Georgia - sue over Obama's school transgender directive
Texas and 10 other states are suing the Obama administration over its directive to U.S. public schools to let transgender students use the bathrooms and locker rooms that match their gender identity
1:58AM ( 6 hours ago )
Teenage suspect in Flowery Branch armed robbery now in police custody
​Flowery Branch police say a 19-year-old suspect connected to an armed robbery that took place last week has turned himself in.
By AccessWDUN Staff
8:03PM ( 12 hours ago )
NTSB releases likely cause of fatal Gainesville plane crash in 2014
It was likely a loss of engine power caused by an undetected valve blockage that brought down a small plane, killing two people on board on Oct. 16, 2014.
4:19PM ( 16 hours ago )
UPDATE: Hunter finds human skull near Auburn; search for bones underway
​Sheriff's officials in Gwinnett County said they're searching an area near the town of Auburn for bones after a hunter found a skull.
1:00PM ( 19 hours ago )