Craig Torres, Simon Kennedy and Joshua Zumbrun
September 1, 2012
Federal Reserve Chairman Ben S. Bernanke, with a little more than a year left in his second term, defended the effectiveness of unconventional monetary policies such as bond purchases and signaled he would soon deploy them again to attack unemployment.
Bernanke’s remarks yesterday to central bankers and economists gathered in Jackson Hole, Wyoming, described the benefits of his signature activism and innovation. They served as a rejoinder to critics outside and inside the Fed, including Richmond Fed President Jeffrey Lacker, who maintain that the returns on his ultra-easy monetary policy are diminishing and may even pose threats such as higher long-term inflation.
The 58-year-old Great Depression scholar, whose term ends in January 2014, left little doubt about his own views on the cost-benefit debate, saying the disadvantages “appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant.”