Fri, May 24, 2013 - Page 15 News List

Bernanke says monetary stimulus to be continued

PROS AND CONS:The Federal Reserve chairman said that despite the risks of monetary easing, pulling back on stimulus too soon could slow the US’ economic recovery

Reuters, WASHINGTON

Further, he warned of the risks to pulling back on stimulus too early.

“A premature tightening of monetary policy could lead interest rates to rise temporarily, but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further,” Bernanke said.

He also suggested the Fed could refrain from selling off some of the mortgage-backed securities it has acquired when the time finally came to tighten monetary policy.

“I personally believe that we could exit without selling any MBS,” he said.

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