President of Federal Reserve (Fed), Ben Bernanke, said Friday that the central bank does not exclude new purchases of bonds to support economic growth and reduce unemployment in the U.S., which it considers a “serious concern,” according to Bloomberg.
“Nonconformist policy costs are manageable, when carefully designed, so we can not exclude the continued use of such strategies, if needed,” said Bernanke in a speech for bankers and economists gathered at the annual Fed symposium held at Jackson Hole, Wyoming.
Bernanke’s speech takes place two weeks before the meeting of the Fed’s monetary policy committee, which will decide whether a further extension of the program to stimulate the U.S. economy is necessary.
Bernanke reviewed the measures taken by the central bank during the financial crisis, saying that they were effective in stimulating economic growth and improving market conditions. He also warned that the unemployment rate will continue to drop only if economic growth will accelerate over the long-term trend.
Bernanke has shown that long periods of high unemployment cause “enormous suffering and loss of human talent” and could also lead to “long structural damage to the economy”.
Many members of the Fed’s monetary policy committee said at the meeting in early august that soon will be needed new measures to stimulate the economy, if there are no signs of a “substantial and sustainable consolidation.”
Fed chief reiterated the remarks, concluding during the speech that “the Federal Reserve will take further action if needed to support a stronger economic recovery and sustainable improvement in labor market conditions in terms of price stability”.
Recent developments in the U.S. economy could be considered by the Fed unsatisfactory. U.S. GDP rose by 1.7% in the second quarter compared to the same period last year, against 4.1% in the last three months of 2011. At the same time, inflation is below the Fed target of 2%.
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