Federal Reserve chairman Ben Bernanke suggested this week that
the economic malaise gripping the U.S. could continue over the next
few years, warranting yet another round of aggressive
monetary maneuvers from the Fed.
Bernanke said on Wednesday that the period of slow growth could
ultimately persist through 2014, some seven years after the 2007
collapse of the
bubble. Amid stalling growth and growing concerns over
unemployment expectations, the U.S.
is also facing deflationary pressures, Bernanke asserted.
In an effort to increase liquidity and allay such concerns, he said
the Fed could purchase securities over the coming months. Bernanke
has already presided over two rounds of quantitative easing
designed to spur hiring and lending.
If high unemployment persists and
remains below 2 percent, the Fed could implement a third round of
purchases, Bernanke indicated. He said the Federal Open Market
Committee "recognizes the hardships imposed by high and persistent
unemployment in an underperforming economy, and it is prepared to
provide further monetary accommodation."
Bernanke also said the Fed does not intend to
raise interest rates
until late 2014, citing a subdued inflation rate and the stumbling
economic outlook. Since 2008, the Fed has purchased more than $2.3
trillion worth of long-term securities and enacted policies that
have kept interest rates near zero.