Bernanke Says Accommodative Policy Needed to Cut Joblessness - Bloomberg

Bernanke Says Accommodative Policy Needed to Cut Joblessness

By Steve Matthews and Jeff Kearns - Mar 26, 2012 2:01 PM PT

Bernanke Says Accommodative Policy Needed for Jobs

Federal Reserve Chairman Ben S. Bernanke said while he’s encouraged by the unemployment rate’s decline to 8.3 percent, continued accommodative monetary policy will be needed to make further progress.
The drop in unemployment may reflect “a reversal of the unusually large layoffs that occurred” in 2008 and 2009, and this process may now be over, Bernanke said in a speech today in Arlington, Virginia. Reducing the jobless rate further will probably require a quicker expansion of business production and consumer demand, which “can be supported by continued accommodative policies,” he said.

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Federal Reserve Board Chairman Ben Bernanke before the Senate Banking, Housing and Urban Affairs Committee hearing on 'the Semiannual Monetary Policy Report to the Congress', on Capitol Hill ion March 1, 2012. Photographer: Michale Reynolds/EPA/Corbis

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March 26 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke speaks about the U.S. labor market and monetary policy. Bernanke, speaking to the National Association for Business Economics in Arlington, Virginia, said continued accommodative monetary policy will be needed to further reduce unemployment. (Source: Bloomberg)

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March 26 (Bloomberg) -- Federal Reserve Bank of Philadelphia President Charles Plosser speaks about monetary policy, the U.S. economy and prospects for further stimulus. He speaks with Michael McKee in Paris on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

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March 26 (Bloomberg) -- Federal Reserve Chairman Ben Bernanke said while he’s encouraged by the unemployment rate’s decline to 8.3 percent, continued accommodative monetary policy will be needed to make further progress. Bloomberg's Mike McKee reports that Bernanke's view is not held by all on the Federal Reserve. He speaks on Bloomberg Television's "In The Loop." (Source: Bloomberg)

Stocks rallied as some investors bet Bernanke’s comments indicate further policy easing is still under consideration. The Federal Open Market Committee on March 13 raised its assessment of the economy while repeating that interest rates are likely to stay low at least through late 2014.
“The bar is, and has been, pretty low for additional action,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “The narrative is, while we have had some improvement, it is not that great, and it’s not clear it is going to last. Now is not the time to be thinking about taking back any of the accommodation.”
The Standard & Poor’s 500 Index (SPX) increased 1.4 percent to 1,416.51 at 4 p.m. in New York, returning to its highest level in almost four years. Treasury 30-year bond yields rose the most in a week as Bernanke’s comments boosted bets inflation will accelerate. The yield climbed three basis points, or 0.03 percentage point, to 3.34 percent.
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