Bernanke Defends Bond Purchases, Predicts Stronger Growth
By - Nov 5, 2010 10:25 PM GMT+0000http://www.bloomberg.com/news/2010-11-05/bernanke-says-goal-of-federal-reserve-asset-purchases-is-faster-recovery-.html
Federal Reserve Chairman Ben S. Bernanke defended the central bank’s decision this week to buy an additional $600 billion in Treasuries, saying the unconventional policy will spur the U.S. recovery.
“We are showing insufficient stimulus,” Bernanke said today in remarks to college students in Jacksonville, Florida. Asset purchases have “the goal of reducing interest rates, providing more stimulus to the economy and, we hope, creating a faster recovery and an inflation rate consistent with long-run stability,” Bernanke said to students.
Bernanke came under fire today from officials in Germany, China, and Brazil, who said his plan to pump cash into the banking system may jar other economies and fail to fuel U.S. growth. Critics including Michael Burry, the former hedge-fund manager who predicted the housing market’s plunge, have said Fed policy is encouraging investors to take on too much risk and threatens to undermine the dollar.
“It’s our problem as well if the U.S. is no longer certain that the old recipes don’t work anymore,” German Finance Minister Wolfgang Schaeuble said today in Berlin. The Fed’s injection of $600 billion was “clueless” and won’t revive growth, he said.
Brazil’s central bank president, Henrique Meirelles, said “excess liquidity” in the U.S. economy is creating “risks for everyone.” In China, Vice Foreign Minister Cui Tiankai said “many countries are worried about the impact of the policy on their economies.” He also said the U.S. “owes us some explanation on their decision on quantitative easing.”
No comments:
Post a Comment