Bernanke warns on long-term joblessness
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