Bernanke: Committee Agreed to Continue Asset Buying

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Sept. 18 (Bloomberg) -- Federal Reserve Chairman Ben Bernanke discusses the committee's decision to continue bond buying. (Source: Bloomberg)

In september 2012, $40 billion per month in mortgage backed securities.

We were already acquiring as part of our maturity extension program.

We stated that subject to our ongoing assessment, purchases would continue until we saw substantial improvement in the outlook for the labor market.

In december 2012, we announce we will continue to purchase $45 million a month -- $45 billion a month and longer-term treasuries.

Our total purchase of longer- term securities remain to -- were maintained at $85 billion a month in addition to the reinvestment or rolling over of maturing securities on our balance sheet.

The committee agreed today to continue asset purchases at that rate subject to the same conditions that we laid out a year ago.

Because the committee tied its asset purchases to the outlook for the labor market it is important to assess how that outlook has evolved.

As i noted earlier, conditions are still far from what all of us would like to see.

Meaningful progress has been made in a year since we announce the asset purchase program.

The unemployment rate has fallen from 8.1% at the time of our announcement to 7.3% today.

Two point 3 million private sector jobs have been created over the same.

. over the past 12 months, aggregate hours of work are up, weekly new claims have fallen by about 50,000 and survey suggests that households receive jobs as more readily available.

Not all labor market developments were positive, however.

The partisan patient -- the partition patient rate -- the participation rate fell.

In light of the stimulative progress, the criterion of substantial improvement on the outlook for the labor market may well be met over the subsequent year.

The committee sought to provide more guidance on how the pace of purchases might be adjusted over time.

The committee anticipated that subject to certain conditions it might be appropriate to begin to moderate the pace of purchases later this year.

We also made clear that adjustments to the pace of purchases would depend on the evolution of the economic outlook.

The receipt of evidence supporting the committee's expectation that gains in the labor market would be sustained and inflation is moving back towards the two percent object to.

-- objective.

The broad contours of the medium-term outlook were close to the views that held in june, but whether a modest reduction would be appropriate at this meaning, the committee concluded the economic data do not yet provide sufficient confirmation of its baseline outlook to warrant such a reduction.

The committee has some concerned that the rapid tightening of financial conditions could have the effect of slowing growth, a concern that would be exacerbated if conditions tightened further.

The extent of the effects of restrictive fiscal policies remain unclear and upcoming debates may involve additional risks to financial markets and the broader economy.

The committee decided to await more evidence that the recovery's progress will be sustained before adjusting the pace of asset purchases.

The committee will continue to monitor economic and financial developments closely.

In judging went to moderate the pace of asset or justice, the committee will assess whether incoming information continues to support the committee's expectation of ongoing improvement in labor market conditions.

As we have said , asset purchases are not on a preset course.

The committee's decisions about their pace will be contingent on the economic outlook and on the ongoing assessment of the likely efficacy and cost of the program.

Let me turn to the fomc forward guidance.

This text has been automatically generated. It may not be 100% accurate.


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