Was Bernanke Intending a Surprise?

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


Chairman, one of my colleagues was one marking when we came in here, we do not often get a surprise from the veteran reserve.

This was a surprise.

You talked about you have not telegraphed anything specifically.

But you have seen the market reaction, i'm sure.

My question is, were you in sending a surprise today?

And by taking this action today, continuing the bond purchases going forward, at what point do you think you are not locating the exit strategy simply by keeping the fed's foot on the gas pedal western mark do you make it more complicated down the road?

-- the fed's foot on the gas pedal?

Do you make it more competent it down the road?

We are somewhat concerned.

I will not overstate it.

We do want to see the effects of higher interest rates on the larger economy, especially mortgage rates in housing.

To the extent our policy decision today makes conditions as the little bit easier -- just a little bit easier, that is desirable.

We want to make sure the economy has adequate supports, and in particular, it is less surprising the markets as it is avoid ing a tightening until we are confident the economy is growing the way we want it to be growing.

This is upper cautionary step, if you will.

-- this is a pre cautionary step, if you will.

The intention is to go further until the economy is performing to this general outlook that we have.

I do not think that we are complicating anything for future fomc's. it is true the assets we can buy add to the size of our balance sheets.

That we have a variety of tools and we think numerous tools that can be used to both manage interest rates and to ultimately unwind alice sheets -- balance sheets when the time comes.

I feel quite comfortable in particular that we can raise interest rates at the appropriate time, even if the ballots sheets remains large for an extended period.

And that would hold for future fomc's as well.

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


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