Federal Reserve Chairman Ben Bernanke said he’s concerned about the toll joblessness is taking on people in the US and that the central bank is trying encourage lending to creditworthy companies.
“High unemployment imposes heavy costs on workers and their families, as well as on our society as a whole,” Bernanke said on Thursday at a Fed-hosted forum in Detroit, where the jobless rate exceeded 24 percent in April.
Bernanke, speaking to an audience that included executives from JPMorgan Chase & Co and auto supplier BorgWarner Inc, expressed “guarded optimism” for a loosening of the credit constraints that have held back economic recovery.
The Fed chairman spoke a day before a Labor Department report that is forecast to show payrolls expanded for a fifth straight month while the unemployment rate stayed close to a 26-year high. Two regional Fed bank presidents on Thursday talked about the need to eventually raise interest rates from a record low, in part to head off the risk of inflation.
Atlanta’s Dennis Lockhart said in a speech that rates may need to be increased even while the unemployment remains elevated. Kansas City’s Thomas Hoenig, who’s dissented from the central bank’s pledge to keep rates low for an “extended period,” predicted that the recovery has the momentum to sustain itself and said the Federal Open Market Committee (FOMC) should raise its benchmark rate to 1 percent within a few months.
The Fed has kept its main interest rate close to zero since December 2008 to stoke job growth. In its statement in April, the FOMC repeated its view that “tight credit” is restraining consumer spending.
In Detroit, home to General Motors Co, Bernanke said the central bank is telling field examiners to encourage lending to creditworthy businesses. Outstanding loans to small businesses have declined to about US$660 billion in the first quarter of this year from almost US$700 billion two years ago, Bernanke said. It’s “difficult to answer” how much of the drop comes from declining demand and how much from supply, he said.
“We’ve still got a long way to go, but I’m hopeful that we’ll see improved conditions for credit going forward,” he said. “The Federal Reserve views this as being absolutely central to the recovery.”
The Fed’s latest survey of senior loan officers, released May 3, showed the smallest proportion of banks in two years restricted lending standards in the first quarter.
Dave Andrea, senior vice president at the Original Equipment Suppliers Association, a Troy, Michigan-based trade group for auto-parts suppliers, said in an interview that while credit has eased from a year ago, companies with less than US$100 million in revenue are having difficulty getting loans for capital equipment.
“The chairman is reading all those surveys,” Andrea said. “But when stuff gets aggregated up to that point you really don’t know what the root causes are.”
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)