Mr. Bernanke, appearing before the Senate a day after he testified before the House, largely repeated the themes and often the words of Wednesday’s testimony.
He said that the Fed had not slackened in its commitment to stimulate the economy and that it would cut back only if the economy was making progress. He also chastised Congress, saying it was impeding economic growth. And he demurred from talking about his own future, choosing instead to listen quietly as senator after senator spoke about him as one speaks of the departed.
This may have been Mr. Bernanke’s final appearance before Congress as Fed chairman. He is widely expected to step down in January.
The expected departure is beginning to erode Mr. Bernanke’s status as a spokesman for the Fed, particularly regarding decisions that most likely will be made without him.
Senator Charles E. Schumer, Democrat of New York, asked Mr. Bernanke about the apparent fragmentation among Fed officials over the question of how much longer the Fed should continue its current bond-buying campaign.
The central bank is adding $85 billion a month to its holdings of Treasury securities and mortgage-backed securities to encourage job creation.
Mr. Bernanke has said that the Fed expects to reduce the volume of its bond-buying later this year, and to end purchases by the middle of next year, as long as economic growth remains “broadly” in line with the Fed’s expectations.
“We have given some fairly specific qualitative guidance about what we’re looking for,” he said on Thursday. Specifically, the Fed wants the unemployment rate to decline from the current rate of 7.6 percent to a rate “in the general vicinity of 7 percent with inflation moving back toward its 2 percent objective.”
The Fed, however, has not included that guidance in its policy statements, and an account of the most recent meeting of the Federal Open Market Committee noted that “about half” of the 19 officials who participated said before the meeting that they expected to end asset purchases by the end of this year.
“There seems to be some disparity between the other members and you,” Mr. Schumer said. “Do they think unemployment will be 7 percent this year?”
Mr. Bernanke responded that officials had various reasons for their views. Some regard asset purchases as ineffective, while others may be more optimistic about the economy. Some have cited concern about the consequences.
But Mr. Bernanke added that the committee had “a very careful discussion” that led to his public statement about the probable timetable for curtailing the purchases. He said on Wednesday that the timetable enjoyed “good support.”
When Mr. Schumer asked if the Fed intended to curtail purchases at its September meeting, Mr. Bernanke responded, “I think it’s way too early to make any judgment.”
Article source: http://www.nytimes.com/2013/07/19/business/fed-chief-again-declines-to-set-timetable-for-stimulus-end.html?partner=rss&emc=rss