Washington, April 26: US Federal Reserve Chairman Ben Bernanke Wednesday exuded frustration with the slow labor market recovery and hinted that the central bank was poised to take further moves to boost economic growth.
The US economy has been expanding “moderately” and labor market conditions have improved in recent months. The unemployment rate has declined but remains elevated, the bank said after its two-day Federal Open Market Committee meeting concluded Wednesday.
The US unemployment rate remained high at a level of 8.2 percent although it has edged down by about 1 percentage point since last August, and highly accommodative monetary policy is necessary given the backdrop of slow and frustrating labor market recovery, Xinhua quoted Bernanke as saying.
Household spending and business fixed investment have continued to advance. Despite some signs of improvement, the housing sector remains depressed, noted participants of the FOMC meeting, the powerful interest-rate setting panel. It decided to keep its current ultra-loose monetary policy to sustain economic recovery.
The Fed reaffirmed its policy decision to keep the exceptionally low levels of federal funds rate, currently in the range of 0-0.25 percent, at least through late 2014 to support economic recovery.
Inflation has picked up somewhat, mainly reflecting higher prices of crude oil and gasoline. However, longer-term inflation expectations have remained stable. “The increase in oil and gasoline prices earlier this year is expected to affect inflation only temporarily,” said the FOMC.
The central bank also forecast that US economic growth will remain moderate over the coming quarters and then pick up gradually, while the unemployment rate will decline gradually.
Top policymakers of the central bank Wednesday upwardly revised its projection of US economic growth this year to a range between 2.4 percent and 2.9 percent from the January forecast between 2.2 percent and 2.7 percent.
Some economists were worried that US tax rate increases and government’s spending cuts next year could pose a big threat to the weak economic recovery.
Bernanke stressed that monetary policy was not a silver bullet, and the nation needed fiscal policy support to bolster the ongoing recovery.