Fed ready to take further steps to spur economy: Bernanke

13:03, August 28, 2010      

Email | Print | Subscribe | Comments | Forum 

U.S. Federal Reserve Chairman Ben Bernanke testifies before the Senate Banking, Housing and Urban Affairs Committee during a hearing on the Federal Reserve's semiannual monetary policy report to the Congress on Capitol Hill in Washington D.C., capital of the United States, July 21, 2010. (Xinhua/Zhang Jun)

U.S. Federal Reserve chairman Ben Bernanke said Friday that the Fed is ready to provide additional monetary accommodation if the economic outlook continues to worsen.

"The committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly," Bernanke said at the Fed annual retreat in Jackson Hole, Wyo.

Those "unconventional measures" might include relaunching the large-scale purchases of Treasury bonds and Mortgage-backed securities (MBS), tools the Fed used during the financial crisis and economic recession to inject more liquidity to the market and bring down interest rates.

In 2009 and early 2010, the Fed bought up 1.25 trillion dollars in mortgage securities and 175 billion dollars in debt from Fannie Mae and Freddie Mac, as well as 300 billion dollars of government debt, in an attempt to drive down mortgage rates and long-term Treasury yields.

The Fed had already made a small shift in the direction of a new round of asset purchases as it gathered Aug. 10 to discuss monetary policies.

After the meeting, the Fed announced decisions to buy more Treasury securities and keep its holdings of securities unchanged instead of letting them shrink as previously planned.

Despite the chairman's reassurances of further stimulus, investors are still struggling to find clues, if any, as to what will trigger the approach.

"At this juncture, the committee has not agreed on specific criteria or triggers for further action," Bernanke said.

He said the U.S. economic recovery and job creation were weaker than expected, but still held to the prospect that economic growth would pick up in 2011.

Bernanke's remarks came just more than an hour after the government announced a significant downward revision of economic growth in the second quarter.

Growth was revised downward to an annual rate of 1.6 percent in the quarter ended in June, compared to the initially estimated pace of 2.4 percent, the Commerce Department reported. That was the slowest quarterly growth since U.S. economic activitys began to pick up in the second half of last year.

Source: Xinhua


  • Do you have anything to say?
  • Players of Iran throw up their coach Velasco Julio during the awarding ceremony at the 16th Asian Men's Volleyball Championship in Tehran, capital of Iran, Sept. 29, 2011. Iran won the champion after beating China 3-1 in the final on Thursday. (Xinhua/Ahmad Halabisaz)

  • Greek artists burn copies of emergency tax notices during a protest against austerity measures in Athens, Greece, on Sept. 29, 2011. The Greek government is facing a new wave of protests as it introduces new austerity measures to obtain the sixth tranche of aids necessary to overcome the acute debt crisis.(Xinhua/Marios Lolos)
  • A winner of the 36th Miss Bikini International 2011 poses for a photo at the Olympic Sailing Center in Qingdao, a coastal city of east China's Shandong Province, Sept. 29, 2011. (Xinhua/Chen Jianli)
  • Staff members are in position at Beijing Aerospace Control Center in Beijing, capital of China, Sept. 29, 2011. Commander-in-chief of China's manned space program Chang Wanquan announced Thursday night that the launch of Tiangong-1 space lab module was successful. (Xinhua/Rao Aimin)
  • Champion of Miss Bikini from Poland receives trophy at the final of the 36th Miss Bikini International World Competition in Qingdao, east China's Shandong Province, Sept. 28, 2011. (Xinhua Photo)

  • Photo taken on Sept. 28, 2011 shows autumn scenery of populus euphratica forests in Ejina Banner, north China's Inner Mongolia. The populus euphratica forests here, with an area of 390,000 mu, or 26,000 hectares, is one of the world's most famous populus euphratica forests. The golden leaves and sunshines here in autumn is able to attract more than 100,000 person-times annually. (Xinhua/Zhao Tingting)