JACKSON HOLE, Wyo., Aug. 26 (UPI) — U.S. Federal Reserve Chairman Ben Bernanke said Friday the Fed would hold back on adding stimulus to overcome a sluggish economy.
In a key speech at the Fed’s annual retreat in Jackson Hole, Wyo., Bernanke said the economy was recovering at a pace that was slower than expected, but that “the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years.”
Policymakers at the Fed, he said, would “continue to consider” what he called “a range of tools that could be used to provide additional monetary stimulus.” He also said the Fed’s policy meeting for September had been bumped from a one-day agenda to two-days “to allow further discussion.”
Bernanke affirmed the historically low federal fund rate, the overnight bank-to-bank lending rate, was expected to stay at zero to 0.25 percent “at least through mid-2013,” just as was stated after the Fed’s policy meeting in August.
In data considered positive, manufacturing was up about 15 percent from the trough it hit in the recent recession and financial firms were far better protected than they were four years ago. Inflation was also expected to even out at 2 percent or “a bit less,” he said.
“Notwithstanding these more positive developments, however, it is clear that the recovery from the crisis has been much less robust than we had hoped,” he said.
Bernanke said policy makers would remain vigilant as the bank performed its tasks “as a financial a financial regulator, a monitor of overall financial stability, and a liquidity provider of last resort.”