Bernanke Suggests Stimulus Programs Will Be Around for a While
(CAMBRIDGE, Mass.) -- When he last spoke in public, Federal Reserve Chairman Ben Bernanke sent the stock market into a corrective tailspin by strongly hinting that stimulus measures in effect for years would be going by the wayside as the economy improves.
Bernanke's comments on June 19 resulted in a huge sell-off on Wall Street as the Dow fell 206 points and continued falling for a few days afterwards.
However, the Fed chief, speaking in a Q&A session after a speech Wednesday, maintained that with unemployment still at 7.6 percent and inflation flat, he would keep record low interest rates at near 0 percent until the jobless rate falls to 6.5 percent.
Bernanke also said that the long-term bond buying program totaling $85 billion a month would remain in effect "for the foreseeable future."
In his remarks to the National Bureau of Economic Research in Cambridge, Mass., Bernanke argued that federal spending cuts are a detriment to economic growth even as consumer confidence improves and the housing market rebounds from its biggest slump in decades.
According to Bernanke, the U.S. economy has yet to fully recover from the Great Recession.
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