Bernanke puts away his printing press
US Federal Reserve Chairman pledges not to print any more money, and weighs in with his economic outlook.
There will be no third round of quantitative easing, but the growth outlook still looks modest, US Federal Reserve chairman Ben Bernanke told a conference in Atlanta this morning (7.45amNew Zealand time).
However he ruled out a “double dip” recession.
Expectations the Federal Reserve chairman would announce ‘QE3’ had swept the markets in the 24 hours before the speech, but Mr Bernanke said he expects the US job market to pick up later this year and further monetary stimulus is not necessary,
The current $US600 billion round of ‘quantitative easing’ – or printing money, to use the vernacular – finishes at the end of this month.
The US economy was expected to improve in the first half of this year and the continued run of poor economic news is the main reason the US dollar has sunk against all currencies – including the New Zealand dollar – over recent months.
But Mr Bernanke put much of this down to the economic slump in Japan following the tsunami in April and said that US jobs and growth should pick up in the second half of this year.
“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” he said.
He was not concerned at this point about inflationary pressures and said inflation would “remain subdued in the medium term.”
Rob Hosking
Wed, 08 Jun 2011
Wed, 08 Jun 2011
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Bernanke puts away his printing press
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