WASHINGTON — Federal Reserve Board chairman Ben Bernanke Monday night echoed recent warnings by other Fed officials that the central bank will not wait for a sizable drop in the jobless rate or for out-of-control inflation before acting to raise interest rates.
In a question-and-answer session at the Woodrow Wilson International Scholars dinner, Bernanke repeated what he and his colleagues on the Federal Open Market Committee have already made clear: that they will focus mainly on the state of the real economy — and unemployment — as well as “where inflation is and where it is going.”
Noting that monetary policy takes a long time to work, Bernanke warned that the Fed “can’t wait until unemployment is where we’d like it to be” and “ can’t wait until inflation gets out of control before we begin the process of normalizing interest rates.”
“We are going to have to make a judgment about when is the appropriate time to begin moving and begin moving towards a more normal policy,” he said.
— Market News International