Federal Reserve Chairman Ben S. Bernanke said the benefits of quantitative easing may vary through time and the central bank is continuing to monitor the impact of its bond purchases.
“So far, we think we are getting some effect, it is kind of early,” Bernanke said today. “We are going to continue to assess how effective” the program is “because it is possible that as you move through time and the situation changes that the impact of these tools could vary.”
Bernanke made the comments in a discussion with Dean Susan M. Collins at the University of Michigan’s Gerald R. Ford School of Public Policy. The 59-year-old Fed chairman is using unprecedented tools including bond purchases and communication policies to spur economic growth and cut U.S. unemployment, which was 7.8 percent last month or slightly below its 8.1 percent average for 2012.
“We will continue to evaluate,” Bernanke said. “We will be assessing the impact of our actions on financial market conditions and looking to see how those link up to developments in labor markets and the broader economy.”
The Federal Open Market Committee last month linked the outlook for its main interest rate to unemployment and inflation for the first time, and said that, in addition to buying $40 billion in mortgage bonds each month, it will expand its asset purchase program by purchasing $45 billion a month of Treasury securities starting in January.
Fed officials said last month they will keep rates near zero as long as the jobless rate is above 6.5 percent and inflation is forecast to be 2.5 percent or less. Previously, they said they would keep rates low through at least mid-2015.