The Federal Reserve is willing to push a key interest rate to zero if necessary and leave rates low for a considerable period of time to ensure the economy escapes the grips of a destabilizing period of falling prices, Federal Reserve governor Ben Bernanke said Wednesday.
Bernanke, one of seven members of the Fed board, spelled out in more detail comments by Federal Reserve chairman Alan Greenspan during congressional testimony last week. Greenspan pledged that the Fed was prepared to keep rates low "for as long as it takes" to get the economy growing at a stronger pace.
Bernanke, in a speech at the University of California at San Diego, said that even when the economy begins growing at healthier rates, that may not be enough to ensure that the risk of deflation has been dealt with.
Deflation is a widespread decline in consumer prices. The problem now faced by the country is that the inflation rate, excluding energy and food, has dropped so low -- by some measurements to around 1 percent -- that any further declines could push the rate to zero or lower.
The US has not seen a prolonged period of falling prices since the Great Depression of the 1930s.
"Monetary ease appears to be indicated for a considerable period," Bernanke said.
Fed officials on June 25 cut the federal funds rate, the interest that banks charge on overnight loans, to 1 percent, the lowest level in 45 years.
Bernanke said keep the funds rate this low may be sufficient to bolster economic growth and eventually make sure that deflation is not a threat. But he said if this does not result in an economic rebound, he was ready to push rates even lower, all the way down to zero, if necessary.
Bernanke said if this did not deal with the problem, the Fed will be ready to move beyond the funds rate to employ unconventional means to influence interest rates.
He said the first stage of a "nontraditional campaign" could be a commitment by the Fed to keep rates at a very low level for an extended period of time.
He said going beyond that, the Fed should be ready to start buying longer term Treasury securities to push down financial market rates by increasing demand for these types of bonds.
Bernanke was more explicit than Greenspan in spelling out what the nontraditional means might be. Bernanke said that the Fed could also provide banks with additional reserves and provide direct loans to banks through increased lending at the Fed's discount window.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique