Bernanke Reinforces QE Message, Depending on Data

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July 17 (Bloomberg) -- Bloomberg chief Washington correspondent Peter Cook reviews comments from the written testimony that Federal Reserve Chairman Ben Bernanke will deliver to the House Financial Services committee. He speaks on Bloomberg Television's "In The Loop."

The message from ben bernanke today is the fed's highly accommodative monetary policy will likely continue for the foreseeable future but saying the fed could taper the bond buyers later this year and add them all together by the middle of next year, the same message he delivered at the last press conference.

Stressing that that outlook depends on the economy.

He says i emphasize because it depends on economic and financial developments, they are by no means in a preset course.

The pace of asset purchases could be reduced somewhat more quickly.

Ben bernanke also commits that after those purchases and that the fed will continue to keep its holdings in treasuries and mortgage-backed securities on its books and reinvest the proceeds.

He signaled that before, but it sounds like the language is even stronger.

He stresses the tapering is not tightening.

Says it is more like taking the foot off the gas pedal.

If the unemployment hit 6.5%, that does not necessarily mean rates will rise automatically.

If it were judged reflect cyclical declines in labor force participation, the committee would be unlikely to view a decline in employment to 6.5% as a sufficient reason to raise the target for the federal funds rate.

Ben bernanke stresses there are several wild cards out there for the economy.

Most is typically come a fiscal policy.

He mentions concerns about the debt ceiling fight to come later in the year.

Says the economy remains vulnerable to unanticipated shocks.

Continuing at a moderate pace in recent quarters, despite the recent headwinds.

Conditions are improving gradually but stresses unemployment is still too high.

Still has concerns about the labor market.

Does specifically said the improvement in housing as being a big boost to the economy and ends with a lengthy discussion about the fed regulatory move, specifically the moves to raise capital standards and leverage ratios and the effort to implement a dog-frank.

A lengthy discussion on regulatory policy and the discussion today.

This will come at 10:00 eastern time.

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


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