US Federal Reserve hints at intervening to stoke recovery
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Your support makes all the difference.Ben Bernanke, the chairman of the US Federal Reserve, warned that the recent reduction in unemployment in the world's largest economy may not be sustainable, reigniting hopes of central bank intervention to stoke the recovery.
MrBernanke's declaration frames a debate on the Fed's next steps that will rage for the next four weeks, ahead of a crunch meeting of the central bank's interest rate-setting committee.
The two-day meeting of the Federal Open Market Committee is shaping up to be contentious, since several members and other prominent officials have signalled their opposition to further loosening monetary policy.
In a speech yesterday to the National Association for Business Economics, Mr Bernanke (pictured) defended the Fed's current policies, which include promising an official interest rate of near-zero for at least the next 2.5 years and buying long-term government debt to push market rates low, too.
Those debt purchases are being funded by sales from the Fed's portfolio of short-term US government bonds, in a $400bn (£252bn) programme called Operation Twist, which is due to expire in June.
Rapidly declining unemployment had lowered economists' expectations for a further bond-buying programme after June, but Mr Bernanke's comments yesterday changed some people's minds.
The committee next meets on 24 and 25 April and the veteran bond investor Bill Gross predicted it is "likely to hint" at a new round of bond buying.
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