BOSTON — Federal Reserve Board chairman Ben Bernanke spoke cautiously about the possibility of additional quantitative easing Friday, less than three weeks before Fed policymakers meet to decide whether to resume large-scale bond purchases.
Bernanke, speaking to a Federal Reserve Bank of Boston conference, reiterated the Federal Open Market Committee’s September commitment to provide “additional accommodation if needed” to meet the Fed’s dual mandate of promoting price stability and full employment.
However, he said the FOMC must weigh the costs and risks of “nonconventional” monetary stimulus.
Bernanke said high unemployment and low inflation suggest “a case for further action,” but those costs and risks “have dictated that the FOMC proceed with some caution” in deciding whether to go ahead with renewed quantitative easing, or “QE2,” as it has come to be popularly known.
In deciding whether to inject more monetary stimulus, Bernanke said the Fed will have to “take account of the potential costs and risks of nonconventional policies.”
He said any action by the Federal Reserve Board will be “contingent” on incoming data.
— Market News International