Ber­nanke warns on long-term job­less­ness

The Pak Banker - - International3 -

NEW YORK: Fed­eral Re­serve Chair­man Ben Ber­nanke warned on Tues­day that a long pe­riod of high un­em­ploy­ment could ex­act a steep so­cial cost, as he and other Fed of­fi­cials de­fended the cen­tral bank against crit­i­cism of its easy money pol­icy.

Minneapolis Fed Pres­i­dent Narayana Kocher­lakota said the Fed's con­tro­ver­sial bond pur­chase pro­gram was needed given a "trou­bling" slow­down in U.S. eco­nomic growth and too low in­fla­tion and em­ploy­ment. The Fed said ear­lier this month it would buy $600 bil­lion in Trea­sury bonds to sup­port a weak econ­omy. Core in­fla­tion has av­er­aged well be­low the Fed's in­for­mal tar­get of about 2 per­cent and the job­less rate re­mains stub­bornly high. "There are ob­vi­ously very se­vere eco­nomic and so­cial con­se­quences from this level of un­em­ploy­ment," Ber­nanke said at Ohio State Uni­ver­sity. "So get­ting new jobs, get­ting un­em­ploy­ment down is of an in­cred­i­ble im­por­tance."

The Fed's pur­chase pro­gram has elicited an un­usual amount of crit­i­cism both at home and abroad, in­clud­ing that it is de­lib­er­ately push­ing down the dol­lar and fu­el­ing as­set bub­bles. -Reuters

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.