Bernanke likely to confirm Fed is on easing path


Alan Wheatley
reuters.com
February 25, 2013

This week should bring clarity on three major issues hanging over the world economy: might the Federal Reserve withdraw monetary stimulus sooner rather than later? Will Italy elect a stable, reform-minded government? Will Japan pick a central bank chief determined to end deflation?

After a set of Fed minutes last week initially interpreted as hawkish, most economists expect Chairman Ben Bernanke to use an appearance before Congress to reaffirm that, in the words of St. Louis Fed President James Bullard on Friday, “Fed policy is very easy right now and is going to stay easy for a long time”.

The U.S. central bank is committed to making open-ended bond purchases, currently $85 billion a month, until unemployment falls to 6.5 percent from 7.9 percent now as long as inflation does not top 2.5 percent.

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