Bernanke Suggests QE3 Many Not Involve Additional Assets Purchases
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Comments from Bernanke suggests additional easing may not involve asset purchases due to the risk of inflation.
With regard to asset purchases, we haven't taken action today. We will be reviewing the outlook going forward, it will be a committee decision. I think the point I would make in terms of where we are today versus where we were say in August of last year when I began to talk about asset purchases, is that at that time inflation was low and falling, many objective indicators suggested that deflation was a non trivial risk and I think that the securities purchases have Ben successful in eliminating deflation risk, I don't think people appreciate necessarily that inflation can be a very ten I couldn't say situation where it could have long-lasting affects on economic growth. In addition, growth in payrolls has actually picked up in the four months before the Jackson Hole speech in August there was about an 80,000 per month payroll Caeshgs so far in 2011, including May, the average is closer to 180,000, so there has been an improvement in the labor market albeit not as strong as we would like.
As of last August we were essentially missing significantly on both sides of our mandate, inflation was too low and falling and unemployment looked like it may be beginning to rise Fwen. In that case the case for monetary action was clear in my mind. I think we were in a different position, certainly not where we would like to be but closer to the dual mandate objectives than we were at that time. Again, the situation is different today than last August but we will continue to monitor the economy and act as needed.
With regard to asset purchases, we haven't taken action today. We will be reviewing the outlook going forward, it will be a committee decision. I think the point I would make in terms of where we are today versus where we were say in August of last year when I began to talk about asset purchases, is that at that time inflation was low and falling, many objective indicators suggested that deflation was a non trivial risk and I think that the securities purchases have Ben successful in eliminating deflation risk, I don't think people appreciate necessarily that inflation can be a very ten I couldn't say situation where it could have long-lasting affects on economic growth. In addition, growth in payrolls has actually picked up in the four months before the Jackson Hole speech in August there was about an 80,000 per month payroll Caeshgs so far in 2011, including May, the average is closer to 180,000, so there has been an improvement in the labor market albeit not as strong as we would like.
As of last August we were essentially missing significantly on both sides of our mandate, inflation was too low and falling and unemployment looked like it may be beginning to rise Fwen. In that case the case for monetary action was clear in my mind. I think we were in a different position, certainly not where we would like to be but closer to the dual mandate objectives than we were at that time. Again, the situation is different today than last August but we will continue to monitor the economy and act as needed.
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