Chairman of the Fed Ben Bernanke held a press conference to talk about the current state of the economy. The majority of his speech focused on issues that have already been addressed many times over, and he really did not provide much insight into what direction the committee is leaning on fiscal policy.
Highlights of the conference were that the Fed maintains the economy is experiencing moderate growth with inflation estimated at or below 2% for 2012. The unemployment situation is improving slowly. When slow job growth is combined with the poor housing market and the European debt crisis the economy is being stifled. An encouraging word to those looking to borrow money is that the Fed confirmed again that the interest rates will remain low through 2014. That same news is a discouragement to those looking for safe investments as today saw a decline in Treasury rates. There was no talk about whether or not operation twist will continue, or the potential for QE3.
The chairman has been encouraging the European leaders to do more to stave off a financial collapse in that part of the world. Mr. Bernanke sees this as a possible fiscal cliff that could poses a serious threat if it is not dealt with properly. This is not the first time he has mentioned this warning.
Looking toward the future of economic growth, the next few years the US economy can expect to see slow growth. While the European debt crisis is holding back rapid growth, it will most likely not push the growth into negative numbers. A series of problems are holding back rapid growth, yet they are not enough to hold back growth completely. There are many fiscal policies that need addressed, and while it is not likely to happen, QE3 is not off the table completely.
There is not complete agreement amongst the members of the committee. Because of this there is no new news to report.
Chairman Ben Bernanke holds a press conference once per quarter in order to give information directly to the press and public about the state of the economy. The full conference can be viewed here, or a synopsis of the event can be read on the Fed website. Following the prepared remarks Mr. Bernanke holds a question and answer time with the press.