Bernanke Kicks the Can on QE3, Points to Fiscal Policymakers
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Ben Bernanke delivered his highly-anticipated speech at Jackson Hole Friday and so far the Chairman is holding off on laying out a case for QE3. Bernanke also pointed to the President and Congress to stimulate the economy on the fiscal side.
Mr. Bernanke reiterated that the Federal Reserve has a range of tools which could be used to provide additional monetary stimulus. However, he said the discussion on the merits and costs of such tools has been pushed out until the September FOMC meeting. That meeting has been extended for two days (the 20th and the 21st) instead of one to allow a fuller discussion.
In his speech, Bernanke nodded toward fiscal policymakers, saying they need to address the issue of fiscal sustainability while also appreciating the fragility of the current economic recovery. He said fiscal policymakers can also promote stronger economic performance through the design of tax policies and spending program. These policies should "increase incentives to work and to save, encourage investments in the skills of our workforce, stimulate private capital formation, promote research and development, and provide necessary public infrastructure."
Referring to the recent budget deal debacle and subsequent U.S. debt downgrade, Bernanke said "the country would be well served by a better process for making fiscal decisions."
Bernanke closed his speech by saying "The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a context of price stability."
Mr. Bernanke reiterated that the Federal Reserve has a range of tools which could be used to provide additional monetary stimulus. However, he said the discussion on the merits and costs of such tools has been pushed out until the September FOMC meeting. That meeting has been extended for two days (the 20th and the 21st) instead of one to allow a fuller discussion.
In his speech, Bernanke nodded toward fiscal policymakers, saying they need to address the issue of fiscal sustainability while also appreciating the fragility of the current economic recovery. He said fiscal policymakers can also promote stronger economic performance through the design of tax policies and spending program. These policies should "increase incentives to work and to save, encourage investments in the skills of our workforce, stimulate private capital formation, promote research and development, and provide necessary public infrastructure."
Referring to the recent budget deal debacle and subsequent U.S. debt downgrade, Bernanke said "the country would be well served by a better process for making fiscal decisions."
Bernanke closed his speech by saying "The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a context of price stability."
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