Bernanke says U.S. economy far from running at full strength

Federal Reserve Chairman Ben Bernanke said Friday the U.S. economy is far from operating at full strength and reiterated his commitment to record easing.

“With unemployment at almost 8 percent, we are still far from the fully healthy and vibrant conditions that we would like to see,” Bernanke said at a meeting in Moscow of his counterparts from the Group of 20. “The United States is using domestic policy tools to advance domestic objectives.”

The U.S. central bank has faced criticism from some foreign officials, including Brazilian Finance Minister Guido Mantega, who in October said that its accommodation has weakened the dollar, threatening to fuel a “currency war” of competitive devaluations. The Fed under Bernanke has expanded assets to a record exceeding $3 trillion and pushed down the benchmark interest rate close to zero.

“We believe that by strengthening the U.S. economy we are helping to strengthen the global economy as well,” Bernanke said.

The Fed last month affirmed a plan to buy $85 billion per month in bonds, seeking to foster growth and reduce a 7.9 percent jobless rate. “The Federal Reserve continues to provide accommodative monetary policy in our effort to foster maximum employment and price stability,” Bernanke said.

Since it last cut the main interest rate in December 2008, the Fed has engaged in three rounds of large-scale asset purchases and offered more guidance on its intention to spur growth. Vice Chairman Janet Yellen in October defended the Fed’s policies in Tokyo, saying that emerging nations have the tools to manage excess capital flows.

Swiss National Bank President Thomas Jordan, who caps the Swiss Franc against the euro, said in Geneva this week he doesn’t see a currency war brewing as “central banks’ monetary policies are internal programs.”

Bernanke said financial regulation will be “one of the most important topics” of the meeting, reiterating the U.S.’s commitment to implement new banking standards known as Basel III.

“Because we live in a globalized financial system where transactions can take place in any jurisdiction and money flows easily across borders, it is critical that we have consistent financial regimes across all members of G-20,” he said. “We will work with our partners to establish consistent policies on matters such as derivatives reform and the resolution of systemically important financial institutions.”

bc-bernanke

More in Herald Business Journal

More business, more competition for Everett kidney dialysis center

Nonprofit Puget Sound Kidney Centers sees large for-profit competitors enter state market.

Suitors, beware: In Seattle, Amazon also brought disruption

The company has grown there from a workforce of about 5,000 to more than 40,000 in 33 buildings.

Tax cuts won’t generate as much economic growth as Trump says

There’s little historical evidence that tax cuts actually pay off in boosting economic growth long-term.

How the Airbus-Bombardier alliance could squeeze Boeing

“It makes Boeing look like they’ve been playing tic tac toe against a chess master,” says an analyst.

City of Marysville adds HR director

The City of Marysville has hired Bill Kolden as its new human… Continue reading

Economic Alliance to host After Hours event at Clothes for Kids

The next Economic Alliance Snohomish County Business After Hours event is from… Continue reading

Speed Networking planned by Lynnwood Chamber

The next Good Morning, Lynnwood Chamber Speed Networking is from 7:30 to… Continue reading

More self-awareness could help build a better medical system

Marcy Shimada of Edmonds Family Medicine writes the second in a series about fixing our health care system.

Scratch-and-sniff brochures aimed to prevent disaster

Puget Sound Energy has distributed more than a million scratch-and-sniff brochures to… Continue reading

Most Read