transcript of bernanke apr 272011 presser

8/7/2019 Transcript of Bernanke Apr 272011 Presser

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April27,2011

NEWSCONFERENCE

FEDERALRESERVEBOARDOFGOVERNORSCHAIRMANBENBERNANKE

WASHINGTON,D.C.

FEDERALRESERVEBOARDOFGOVERNORSCHAIRMANBENBERNANKEHOLDSA

NEWSCONFERENCE

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Washington,D.C.20037Transcript/Programming:Tel.301-731-1728

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FEDERALRESERVESYSTEMBOARDOFGOVERNORSCHAIRMANBEN

BERNANKEHOLDSANEWSCONFERENCE

APRIL27,2011

SPEAKER:FEDERALRESERVESYSTEMBOARDOFGOVERNORSCHAIRMANBENBERNANKE

BERNANKE:Goodafternoon.Welcome.

Inmyopeningremarks,I'dliketobrieflyfirstreview


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today'spolicydecision.I'llthenturnnexttotheFederal

OpenMarketCommittee'squarterlyeconomicprojections,alsobeingreleasedtoday.AndI'llplacetoday'spolicydecision

inthecontextofthecommittee'sprojectionsandtheFederalReserve'sstatutorymandatetofostermaximumemploymentand

pricestability.

I'llthenbegladtotakeyourquestions.

Throughouttoday'sbriefingmygoalwillbetoreflecttheconsensusofthecommitteewhiletakingnoteofthe

diversityofviewsasappropriate.Ofcourse,myremarksand

interpretationsaremyownresponsibility.

Initspolicystatementreleasedearliertoday,thecommitteeannouncedfirstthatitismaintainingitsexisting

policyofreinvestingprincipalpaymentsfromitssecuritiesholdings,and,second,thatitwillcompleteitsplanned

purchasesof$600billionoflonger-termTreasurysecuritiesbytheendofthecurrentquarter.

Ofcourse,goingforward,thecommitteewillregularly

reviewthesizeandcompositionofitssecuritiesholdingsin

lightofincominginformation,andispreparedtoadjustthoseholdingsasneededtomeettheFederalReserve's

mandate.

Thecommitteemadenochangetodayinthetargetrangeofthefederalfundsrate,whichremainsat0to0.25

percent.Thecommitteecontinuestoanticipatethateconomicconditions,includinglowratesofresourceutilization,

subduedinflationtrendsandstableinflationexpectationsarelikelytowarrantexceptionallylowlevelsforthe

federalfundsrateforanextendedperiod.

Inconjunctionwithtoday'smeetings,FOMCparticipants

submittedprojectionsforeconomicgrowth,theunemploymentrateandtheinflationratefortheyears2011to2013and

overthelongerrun.Theseprojectionsareconditionaloneachparticipant'sindividualassessmentoftheappropriate

pathofmonetarypolicyneededtobestpromotethecommittee'sobjectives.

BERNANKE:Atableshowingtheprojectionshasbeen

distributed.I'mgoingtotodayonthecentraltendency

projections,whichexcludethethreehighestandthreelowest


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maintaininflationatzerowouldincreasetherisksof

experiencinganextendedboutofdeflationorfallingwagesandprices,whichinturncouldleademploymenttofallbelow

itsmaximumsustainablelevelforaprotractedperiod.

Hence,thegoalofliterallyzeroinflationisnotconsistentwiththeFederalReserve'sdualmandate.Indeed,

mostcentralbanksaroundtheworldaimtosetinflationabovezero,usuallyatabout2percent.

Iturnnowtothecommittee'seconomicoutlook.As

indicatedintoday'spolicystatement,thecommitteeseesthe

economicrecoveryasproceedingatamoderatepace.Householdspendingandinvestmentinequipmentandsoftwarecontinues

toexpand,supportingtherecovery,butnonresidentialinvestmentisstillweakandthehousingsectorisdepressed.

Inthelabormarket,overallconditionscontinueto

improvegradually.Forexample,theunemploymentratemoveddownabitfurtherandpayrollemploymentincreasedinMarch.

Newclaimsforunemploymentinsuranceandindicatorsofhiringplansarealsoconsistentwithcontinuedimprovement.

Lookingahead,committeeparticipantsexpectamoderaterecoverytocontinuethrough2011,withsomeaccelerationof

growthprojectedfor2012and2013.Specifically,asthetableshows,participants'projectionsforoutputgrowthhave

acentraltendencyof3.1percentto3.3percentforthisyear,butriseto3.5percentto4.2percentin2012and

aboutthesamein2013.

TheseprojectionsarealittlebelowthosemadebythecommitteeinJanuary.Themark-downofgrowthin2011in

particularreflectsthesomewhatslowerthananticipatedpace

ofgrowthinthefirstquarter.

Theoutlookforabove-trendgrowthisassociatedwiththeprojectedreductionintheunemploymentrate,whichis

seenasedgingdownto8.4to8.7percentinthefourthquarterofthisyear,andthendeclininggraduallyto6.8

percentto7.2percentinthefourthquarterof2013,stillwellabovethecentraltendencyofparticipants'longer-run

projectionsforunemploymentof5.2percentto5.6percent.

Theprojecteddeclineintheunemploymentrateis

relativelyslow,largelybecauseeconomicgrowthisprojected


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tobeonlymodestlyabovethetrendgrowthrateofthe

economy.

Ontheinflationfront,commoditypriceshaverisensignificantlyrecently,reflectinggeopoliticaldevelopments

androbustglobaldemand,amongotherfactors.

BERNANKE:Increasesincommoditypricesareinturnboostingoverallconsumerinflation.However,measuresof

underlyinginflation,thoughhavingincreasedmodestlyinrecentmonths,remainsubdued,andlonger-terminflation

expectationshaveremainedstable.

Consequently,thecommitteeexpectstheeffectson

inflationofhighercommoditypricestobetransitory.Astheincreasesincommoditypricesmoderate,inflationshould

declinetowarditsunderlyinglevel.

Specifically,participants'projectionsforinflationhaveacentraltendencyof2.1to2.8percentforthisyear,

noticeablyhigherthanintheJanuaryprojections,beforedecliningto1.2percentto2.0percentin2012,andthen

runningat1.4to2.0percentin2013,bothaboutthesameas

inJanuary.

Thecommittee'seconomicprojectionsprovideimportantcontextforunderstandingtoday'spolicyaction,aswellas

thecommittee'sgeneralpolicystrategy.Monetarypolicyaffectsoutputandinflationwithalag.Socurrentpolicy

actionsmustbetakenwithaneyetothelikelyfuturecourseoftheeconomy.

Thus,thecommittee'sprojectionsoftheeconomy,not

justcurrentconditionsalone,mustguideitspolicy

decisions.

Thelagswithwhichmonetarypolicyaffectstheeconomyalsoimplythatthecommitteemustfocusonmeetingits

mandatedobjectivesoverthemediumterm,whichcanbeasshortasayearortwo,butmaybelonger,dependingonhow

fartheeconomyisinitiallyfromconditionsofmaximumemploymentandpricestability.

Tofostermaximumemployment,thecommitteesetspolicy

totrytoachievesufficienteconomicgrowthtoreturnthe

unemploymentrateovertimetoitslong-termnormallevel.At


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8.8percent,thecurrentunemploymentrateiselevated

relativetothatlevelandprogresstowardmorenormallevelsofunemploymentseemslikelytobeslow.

Thesubstantialongoingslackinthelabormarketand

therelativelyslowpaceofimprovementremainimportantreasonsthatthecommitteecontinuestomaintainahighly

accommodativemonetarypolicy.

Inthemediumterm,thecommitteealsoseekstoachieveamandate-consistentinflationrate,whichparticipants'

longer-termprojectionsforinflationsuggestis2percentor

abitless.

Althoughtherecentsurgeincommoditypriceshasledinflationtopickupsomewhatinthenearterm,thecommittee

continuestoprojectinflationtoreturntomandate-consistentlevelsinthemediumterm,asIhave

discussed.

Consequently,theshort-termincreaseininflationhasnotpromptedthecommitteetotightenpolicyatthis

juncture.

Importantly,however,thecommittee'soutlookfor

inflationispredicatedonlonger-terminflationexpectationsremainingstable.Ifhouseholdsandfirmscontinuetoexpect

inflationtoreturntoamandate-consistentlevelinthemediumterm,thenincreasedcommoditypricesareunlikelyto

inducesignificantsecond-roundeffectsinwhichinflationtakesholdinnoncommoditypricesandinnominalwages.

Thus,besidesmonitoringinflationitself,thecommittee

willpaycloseattentiontoinflationexpectationsandto

possibleindicationsofsecond-roundeffects.

Inprovidingextraordinarymonetarypolicyaccommodationintheaftermathofthecrisis,thecommitteehasnotonly

reduceditstargetforfederalfundsratetoaverylowlevel,buthasalsoexpandedtheFederalReserve'sbalance

sheetsubstantially.

BERNANKE:Thecommittee,atthismeeting,continuesitsongoingdiscussionoftheavailabletoolsforremovingpolicy

accommodationatsuchtimeasthatshouldbecomeappropriate.


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Thecommitteeremainsconfidentthatithasthetools

thatitneedstotightenmonetarypolicywhenitisdeterminedthateconomicconditionswarrantsuchastep.And

inchoosingthetimetobeginpolicynormalization,aswellasthepaceofthatnormalization,wewillcarefullyconsider

bothpartsofourdualmandate.

Thankyouagain.AndI'dbegladtotakeyourquestions.

QUESTION:Mr.Chairman,tomorrowwe'regoingtogetaprettyweakfirstquarterGDPnumber.Yourownprojections

fortheyearhavebeendowngradedinthismeeting.

Firstofall,whatdoyouseeasthecausesoftheweak

growthtostarttheyear,evenwithmonetaryeasing,evenwiththepayrolltaxcuts?

Andwhat'sbehindthisweakerforecastfor2011GDP?

BERNANKE:You'recorrect.Wehaven'tseentheGDPnumber

yet,butwe,likemostprivate-sectorforecasters,areexpectingarelativelyweaknumberforthefirstquarter:

maybesomethingalittleunder2percent.

Mostofthefactorsthataccountfortheslowergrowth

inthefirstquarterappeartoustobetransitory.Theyincludethingslike,forexample,lowerdefensespendingthan

wasanticipated,whichwillpresumablybemadeupinalaterquarter,weakerexports--andgiventhegrowthintheglobal

economy,weexpecttoseethatpickupagain--andotherfactorslikeweatherandsoon.

Now,therearesomefactorstherethatmayhavea

longer-termimplication.Forexample,construction,both

residentialandnonresidential,wasveryweakinthefirstquarter.Andthatmayhavesomeimplicationsgoingforward.

SoIwouldsaythat--roughly,thatmostofthe

slowdowninthefirstquarterisviewedbythecommitteeasbeingtransitory.Thatbeingsaid,we'vetakenourforecast

downjustabit,takingintoaccountfactorslike--likeweakerconstructionandpossiblyjustabitlessmomentumin

theeconomy.

QUESTION:Mr.Chairman,givenwhatyouknowaboutthe

paceoftheeconomynow,whatisyourbestguessforhowsoon


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theFedneedstobegintowithdrawitsextraordinarystimulus

fortheeconomy?

Andcouldyoualsosaywhatisyourworkingdefinitionofwhat"extendedperiod"meansfromthepurposesoftheFed

statement?

BERNANKE:Well,currently,as--asthestatementsuggests,weareinamoderaterecovery.We'llbelooking

verycarefullyfirsttoseeifthatrecoveryisindeedsustainable,aswe--aswebelieveitis.Andwe'llalsobe

lookingverycloselyatthelabormarket.

We'veseenimprovementinthelabormarketinthefirst

quarterrelativetothelatterpartoflastyear,butwe'dliketoseecontinuingimprovementandmorejobcreation

goingforward.

Atthesametime,we'realsolookingverycarefullyatinflation,theotherpartofourmandate.AsI'venoted,

inflation--headlineinflationisatleasttemporarilyhigherbeingdrivenbygasolinepricesandsomeother

commodityprices.Ourexpectationisthat--thatinflation

willcomedowntowardamorenormallevel,butwe'llbewatchingthatcarefullyandalsowatchinginflation

expectations,which--youknow,whichareimportantthattheyremainwell-anchoredifwe'regoingtoseeinflation

remainundergoodcontrol.

Sotoansweryourquestion,Idon'tknowexactlyhowlongitwillbebeforeatighteningprocessbegins.It's

goingtodepend,obviously,ontheoutlookandonthosecriteriawhichIsuggested.

Theextendedperiodlanguageisconditionedonexactlythosesamepoints.Extendedperiodisconditionedonresource

slack,onsubduedinflationandonstapleinflationexpectations.

BERNANKE:Oncethoseconditionsareviolatedorarewe

movingawayfromthoseconditions,thatwillbethetimethatweneedtobegintotighten.

Extendedperiodssuggestthattherewouldbeacoupleof

meetingsprobablybefore--beforeaction,butunfortunately,

thereasonweusethisvaguerterminologyisthatwedon't


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knowwithcertaintyhowquicklyresponsewillberequired.

And,therefore,wewilldoourbesttocommunicatechangesinourview,as--butthatwilldependentirelyonhowthe

economyevolves.

QUESTION:Mr.Chairman,first,thanksfordoingthis.Thisisatremendousdevelopment.

TherearecriticswhosaythatFedpolicyhasdriven

downthevalueofthedollarandalowervaluetothedollarreducesAmericanstandardofliving.

HowdoyourespondtothecriticismthatessentiallyFedpolicyhasreducedAmericanstandardofliving?

BERNANKE:Thanks.First,Ishouldstartbysayingthat

thesecretaryofthetreasury,ofcourse,isthespokespersonforU.S.policyonthedollar.AndSecretaryGeithnerhad

somewordsyesterday.

Letmejustaddtowhathesaid,firstbysayingthattheFederalReservebelievesthatastrongandstabledollar

isbothinAmericaninterestsandintheinterestofthe

globaleconomy.

Therearemanyfactorsthatcausethedollartomoveupanddownovershortperiodsoftime,butoverthemedian

term,whereourpolicyisaimed,wearedoingtwothings.

First,wearetryingtomaintainlowandstableinflation,byourdefinitionofpricestability,by

maintainingthepurchasingvalueofthedollar,keepinginflationlow--that'sobviouslygoodforthedollar.

Thesecondthingwe'retryingtoaccomplishistogetastrongereconomyandtoachievemaximumemployment.And,

again,astrongeconomy,growing,withattractingforeigncapitalisgoingtobegoodforthedollar.

Soinourview,ifwedowhat'sneededtopursueour

dualmandateofpricestabilityandmaximumemployment,thatwillalsogeneratefundamentalsthatwillhelpthedollarin

themediumterm.

QUESTION:(inaudible)noticingthatit'sbeen

unsuccessfulsofar.


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BERNANKE:Well,thedollar--thedollarfluctuates.Onefactor,forexample,thathascausedfluctuationsthathas

beenquiteextremeduringthecrisishasbeenthesafehaveneffect.So,forexample,duringtheheightofthecrisisin

thefallof2008,moneyflowedintothetreasurymarketanddroveupthevalueofthedollarquitesubstantially,

reflectingthefactthatU.S.capitalmarketsarethedeepestandmostliquidintheworld.Andalotofwhatyou'veseen

overthelastcoupleofyearsisjusttheunwindingofthatastheeconomyhasstrengthenedandasuncertaintyhas--has

beenreduced.Butthat'sindicative,Ithink,ofthe--of

thehighstandingthatthedollarstillretainsintheworld.

Again,ultimately,thebestthingwecandotocreatestrongfundamentalstothedollarinthemediumtermisto,

first,keepinflationlow,whichmaintainsthebuyingpowerofthedollar;andsecond,tocreateastrongeconomy.

QUESTION:ManyAmericansareupsetatgasolineprices

risingsofastandthatfoodpricesarealsogoingup.Canyoutalkaboutwhetherthere'sanythingthattheFedcanor

shoulddoaboutthat?Andcanyoualsocomment--elaborate

ontheincreasethatwe'veseenintheinflationforecastthattheFedputouttoday?

BERNANKE:Sure.Thanks,John(ph).

Sofirstofall,gasolinepricesobviouslyhaverisen

quitesignificantly.Andwe,ofcourse,arewatchingthatcarefully.Buthighergaspricesareabsolutelycreatinga

greatdealoffinancialhardshipforalotofpeople.Andgas,ofcourse,isanecessity.Peopleneedtodrivetoget

towork.Soit'sobviouslyaverybaddevelopmenttoseegas

pricesrisesomuch.

Highergasprices,higheroilpricesalsomakeeconomicdevelopmentslessfavorable.Ontheonehand,obviously,the

highergaspricesaddtoinflation.Ontheotherhand,bydrainingpurchasingpowerfromhouseholds,highergasprices

arealsobadfortherecovery.Theycausegrowthtodeclineaswell.

BERNANKE:Soitsadoublewhammycomingfromhigher

gasolineprices.


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Now,our--ourinterpretationoftheincreaseingas

pricesistheeconomist'sbasicmantraofsupplyanddemand.Ontheonehand,wehavearapidlygrowingglobaleconomy,

emergingmarketeconomiesaregrowingveryquickly,andtheirdemandforcommodities,includingoil,isvery,verystrong.

Indeed,essentiallyalloftheincreaseinthedemand

foroilinthelastcoupleyears,inthelastdecadehascomefromemergingmarketeconomies.IntheUnitedStates,our

demandforoil,ourimportshaveactuallybeengoingdownovertime.

Sothedemandiscomingfromagrowingeconomy,wherewe'veseenabouta25percentincreaseinemergingmarket

outputinthelast--inthelast--sincebeforethecrisis.

Andonthesupplyside,aseverybodyknowswhowatchestelevision,we'veseendisruptionsintheMiddleEastand

NorthAfrica,inLibyaandinotherplacesthathaveconstrainedsupply,supplyhasnotbeenmadeup,andthat,in

turn,hasdrivengaspricesupquitesignificantly.

So,again,thisisaveryadversedevelopment.It

accountsintheshortrunfortheincreaseinour--prettymuchalmostalloftheincreaseinourinflationforecast,at

leastintheverynearterm.

There'snotmuchtheFederalReservecandoaboutgasprices,perse,atleastnotwithoutderailinggrowth

entirely,whichiscertainlynot--nottherightwaytogo.

Afterall,theFedcan'tcreatemoreoil.Wedon'tcontrolthegrowthratesofemergingmarketeconomies.

Whatwecandoisbasicallytrytokeephighergaspricesfrompassingintootherpricesandwagesthroughout

theeconomyandcreatingabroaderinflation,whichwouldbemuchmoredifficulttoextinguish.

Again,ourviewisthat,mostlikely--ofcourse,we

don'tknowforsure,butwe'llbewatchingcarefully--ourviewisthatgaspriceswillnotcontinuetoriseatthe

recentpace.Andastheystabilizeorevencomedown,ifsituationstabilizesintheMiddleEast,thatthatwill

providesomereliefontheinflationfront.Butwe'llhaveto

watchitverycarefully.


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QUESTION:Mr.Chairman,you'vestatedseveraltimesthisyearthattherecoverywon'tbefullyestablisheduntilwe

seeasustainedperiodofstrongerjobcreation.

First,hasitbecometrulyestablishedyet?Andifnot,what'syourdefinitionofasustainedperiod?What'syour

definitionofstrongerjobcreation?

BERNANKE:Well,asImentioned,we'vemadealotofprogress.LastAugust,whenwebegantotalkaboutanother

roundofsecuritiespurchases,growthwasverymoderateand

wewereactuallyquiteconcernedthatgrowthwasnotsufficienttocontinuetobringtheunemploymentratedown.

Sincethen,wehaveseenareasonableamountofpayroll

creation,jobcreation.Andthatpickedupinthemostrecentfewmonths,togetherwiththedeclineintheunemployment

ratefrom,youknow,10percentdowntothecurrentrateof8.8percent.

Sothelabormarketisimprovinggradually,aswesayin

ourstatement.Andwejustliketomakesurethatthatis

sustainable.Andthelongeritgoeson,themoreconfidentweare.

Andagain,itisencouragingtoseetheimprovement

we'veseeninrecentmonths.Thatbeingsaid,thepaceofimprovementisstillquiteslow.Andwearediggingourselves

outofavery,verydeephole.Wearestillsomethinglike7million-plusjobsbelowwherewewerebeforethecrisis.

Andso,clearly,thefactthatwe'removingintheright

direction,eventhoughthat'sencouraging,doesn'tmeanthat

thelabormarketisingoodshape.It's--obviously,it'snot,andwe'regoingtohaveto,youknow,continuetowatch

andhopethatwewillgetstrongerandincreasinglystrongjobcreationgoingforward.

QUESTION:Mr.Chairman,yousayinyourstatementthat

longer-terminflationexpectationshaveremainedstable,butanumberofmeasuresofinflationexpectationshaverisenin

recentmonths.Andit'sclearfromyourforecastthatyouexpectheadlineinflationtorunabovecoreinflationfor

someperiod.


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IsthereanythingthattheFederalReservecandoto

preventthepublicfrom,maybe,incorrectlyassumingthataperiodofhigherinflationisonitswayasaresult?Thank

you.

BERNANKE:Well,again,theinflationexpectationsthatweareconcernedaboutaremedium-terminflation

expectations.Sowehaveseen,forexample,in--infinancialmarketsandtheindexedbondmarket,forexample,

orinsurveysliketheMichigansurvey,we'veseennear-terminflationexpectationsrisefairlysignificantly,whichis

reasonablegivenhighercommodityprices,highergasprices.

Butforthemostpart,althoughthere'sbeensome

movementhereandthere,forthemostpart,Ithinkit'sfairtosaythatmedium-terminflationexpectationshavenot

reallymovedverymuch.AndtheystillindicateconfidencethattheFedwillensurethatinflationinthemediumterm

willbeclosetowhatI'vecalledthemandate-consistentlevel.

Whatcanwedo?Intheshortrun,wecancommunicateand

trytomakesurethepublicunderstandswhatourpolicyis

attemptingtodo,tobeclearwhatourobjectivesareandwhatstepswe'rewillingtotaketomeetthoseobjectives.

BERNANKE:Ultimately,if--ifinflationpersistsorif

inflationexpectationsbeingtomove,thenthere'snosubstituteforaction.Wewouldhaveto--wewouldhaveto

respond.

Ithinkwhileit'svery,veryimportantforustotrytohelptheeconomycreatejobsandtosupporttherecovery,I

thinkeverycentralbankerunderstandsthatkeepinginflation

lowandstableisabsolutelyessentialtoasuccessfuleconomy.Andwewilldowhat'snecessarytoensurethatthat

happens.

QUESTION:Mr.Chairman,whatwillbetheimpactontheeconomicrecovery,jobcreationandratesonmortgagesand

otherloanswhentheFedendsits$600billionbondbuyingprogram?

Andaquickfollow-upiswilltheFed--howlongwill

theFedcontinuetoallowforreinvestments?


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BERNANKE:Well,asI'venotedandasyou'reallaware,

weare--wearegoingtocompletetheprogramattheendofthesecondquarter,$600billion.Wearegoingtodothat

prettymuchwithoutpapering.We'rejustgoingtolet--letthepurchasesend.

Ourviewisthat--basedonpastexperienceandbased

onouranalysisisthattheendoftheprogramisunlikelytohavesignificanteffectsonfinancialmarketsoronthe

economy,thereasonbeingthat,first,justasimplepointthatwehopethatwehavetelegraphedtoday,wehopewehave

communicatedwhatwe'replanningtodoandthatthemarkets

havewellanticipatedthisstep.

Andyouwouldexpectthatpolicystepswhicharewellanticipatedbythemarketwouldhaverelativelysmall

effects,becausewhatevereffectsthey'regoingtohavewouldhavealreadybeencapitalizedinthefinancialmarkets.

Secondly,wesubscribegenerallytowhatwecallhere

the"stockview,"oftheeffectsofsecuritiespurchases,bywhichImeanthatwhatmattersprimarilyforinterestrates,

stockpricesandsoonisnotthepaceofongoingpurchase,

butratherthesizeoftheportfoliothattheFederalReserveholds.

BERNANKE:Andsowhenwecompletetheprogram,asyou

noted,wearegoingtocontinuetoreinvestmaturingsecurities,bothtreasuriesandMBS.Andsotheamountof

securitiesthatweholdwillremainapproximatelyconstant.Therefore,weshouldn'texpectanymajoreffectofthat.

Putanotherway,theamountofease--monetarypolicy

easingshouldessentiallyremainconstantgoingforwardfrom

--fromJune.

Atsomepoint,presumablyearlyinourexitprocess,wewill--Isuspectbasedonconversationswe'vebeenhaving

aroundtheFOMCtable--it'sverylikelythatanearlystepwouldbetostopreinvestingallorapartofthesecurities

whichcoming--whicharematuring.Buttakenotethatthatstep,althougharelativelymodeststep,doesconstitutea

policytightening,becauseitwouldbeloweringthesizeofourbalancesheetandthereforewouldbeexpectedto

essentiallytightenfinancialconditions.


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Thatbeingsaid,wethereforehavetomakethatdecision

basedontheoutlook,basedonourviewofhowsustainabletherecoveryisandwhattheconditionofthesituationis--

respecttoinflation.Sowewillbasethatdecisionontheevolvingoutlook.

QUESTION:Doyouthink(inaudible)willbeseveral

monthsaway?

BERNANKE:Itdependsontheoutlook.Thecommitteewillhavetomakeajudgment.

QUESTION:IsitintheFed'spowertoreducetherateofunemploymentmorequickly?

QUESTION:Howwouldyoudothat?Andwhyareyounot

doingit?

BERNANKE:Well,Ishouldsay,firstofall,thatintermsoftryingtohelpthiseconomystabilizeandthen

recover,theFederalReservehasundertakenextraordinarymeasures.Thoseinclude,obviously,allthestepswetookto

stabilizethefinancialsystemduringthecrisis,again,many

ofwhichwereextraordinarymeasurestakenunderextremecircumstances.

Evenbeyondthestepswetooktostabilizethesystem,

wehavecreatednewwaystoeasemonetarypolicy.We'vebroughtthefederalfundsratetargetclosetozero.Wehave

usedforwardguidanceinourlanguagetoaffectexpectationsofpolicychanges.

Andofcourse,aseveryoneknows,wehavenowbeen

throughtworoundsofpurchasesoflonger-termsecurities,

whichhaveseemedtohavebeeneffectiveineasingfinancialconditionsand,therefore,providingsupportforrecoveryand

foremployment.

Goingforward,we'llhavetocontinuetomakejudgmentsaboutwhetheradditionalstepsarewarranted.Butaswedo

so,wehavetokeepinmindthatwedohaveadualmandate,thatwedohavetoworryaboutboththerateofgrowth,but

alsotheinflationrate.

AndasIwasindicatingearlier,Ithinkthateven

purelyfromanemploymentperspective,thatifinflationwere


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tobecomeunmoored,inflationexpectationsweretorise

significantly,thatthecostofthatintermsofemploymentlossinthefuture,aswehadtorespondtothat,wouldbe

quitesignificant.

Andsowedohavetomakesurethatwearepayingadequateattentiontobothsidesofourmandate,butclearly

itisthecasethatwehavedoneextraordinarythingsinordertotrytohelpthiseconomyrecover.

QUESTION:Mr.Chairman,it'stheviewofalotof

economiststhatthesecondroundofquantitativeeasing

hasn'tdonemuchtohelptheeconomy.

Whatpositiveeffectscanyoupointtodirectly?Andiftherearepositiveeffects,canyoureallyaffordtoendthe

programinJunewiththeunemploymentratestillaround9percent?

BERNANKE:Thankyou.

Well,first,Idobelievethatthesecondroundof

securitiespurchaseswaseffective.Wesawthatfirstinthe

financialmarkets.

Thewaymonetarypolicyalwaysworksisbyeasingfinancialconditions,andwesawincreasesinstockprices,

wesawreducedspreadsincreditmarkets,wesawreducedvolatility.

Wesawallthechangesinfinancialmarkets,andquite

significantchanges,thatonewouldexpectifonewasdoinganordinaryeasingofpolicyviaareducedfederalfunds

rate.

BERNANKE:Andindeedwesawthesametypesof--of

financialmarketresponsesinthefirstround,whichbeganinMarchof2009.Sowe--wewereabletogetthefinancial

easingthatweweretryingtoget.Wedidgetverysignificanteasingfromthis--fromthisprogram.

Youwouldexpect,basedondecadesofexperience,that

easingfinancialconditionswouldleadtobettereconomicconditions.AndIthinkthe--theevidenceisconsistent

withthataswell.


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AsIdiscussedinmoredetailinmyHumphrey-Hawkins

testimonyatthebeginningofMarch,betweenlateAugust,whenIfirstindicatedthattheFederalReservewasseriously

consideringthisadditionalstep,andearlythisyear,notonlytheFederalReservebutmanyoutsideforecastersupgrade

their--theirforecasts.Andwesaw--wesawstrengtheninglabormarketconditions,higherratesofpayroll,job

creation,etcetera.

Now,the--theconclusion,therefore,thatthesecondroundofsecuritiespurchaseswasineffectivecouldonlybe

validatedifonethoughtthatthis--thisstepwasa

panacea,thatitwasgoingtosolvealltheproblemsandreturnustofullemploymentovernight.

Wewereveryclearfromthebeginningthat,whilewe

thoughtthiswasanimportantstepandthatitwasatanimportanttimewhenwewereallworriedaboutadoubledip

andwewereworriedaboutdeflation,wewereveryclearthatthiswasnotgoingtobeapanacea,thatitwasonlygoingto

turntheeconomyintherightdirection.

Andindeed,wepublishedsomeanalyticswhichgavejob

creationnumberswhichweresignificantbutnot--certainlynotenoughto--tocompletelysolvetheenormousjobs

problemthatwehave.

So,again,relativetowhatweexpectedandanticipated,Ithinktheprogramwassuccessful.

Whynotdomore?Again,thiswassimilartothequestion

Ireceivedearlier.Thetradeoffsaregetting--aregettinglessattractiveatthispoint.Inflationhasgottenhigher.

Inflationexpectationsareabithigher.

It'snotclearthatwecangetsubstantialimprovements

inpayrollswithoutsomeadditionalinflationrisk.Andinmyview,ifwe'regoingtohavesuccessincreatingalong-run

sustainablerecoverywithlotsofjobgrowth,we'vegottokeepinflationundercontrol.Sowe'vegottolookatbothof

those--bothpartsofthemandateaswe--aswechoosepolicy.

QUESTION:Mr.Chairman,what'stherightresponseif

highoilpricespersist?


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QUESTION:Ontheonehand,theypushinflationhigher.

Ontheother,theycanhurttheeconomybyhurtingspending.Inthecurrentenvironment,what'sthebeststrategy?

BERNANKE:Well,we'regoingtocontinueto--tosee

whathappens.Ouranticipationisthatoilpriceswillstabilizeortendtocomedown.Ifthathappens,orifat

leastoilpricesdon'tincreasesignificantlyfurther,theninflationwill--willcomedownandwe'llbeclosetoour

medium-termobjectives.

Soaswelookatoilprices,youknow,asyoupointout,

wehavetolookatbothsidesofthesituation.Idothinkthatoneofthekeythingsthatwe'llbelookingatwillbe

inflationexpectations,becauseifmedium-terminflationexpectationsremainwellanchoredandstable,sothatfirms

atnotpassingon,atleastonanongoingsustainedbasis,thesehighercostsintobroaderpricesandcreatingabroader

inflationintheeconomy,aslongasinflationexpectationsarewell--wellstabilized,thatwon'thappen.Thenwe'll

feelmorecomfortablejustwatchingandwaitingandseeinghowthingsevolve.

Again,ifwefearthatinflationexpectationslooklikethey'rebecominglessanchored,wewouldhavetorespondto

that.

QUESTION:(inaudible)withNightlyBusinessReport.

You'vetalkedalotinthepastabouttheproblemoflong-termunemployment.CantheFedeffectivelyreduce

long-termunemployment?

BERNANKE:Well,first,you'reabsolutelyright.

Long-termunemploymentinthecurrenteconomyistheworst,really,theworstit'sbeeninthepost-warperiod.

BERNANKE:Currently,somethinglike45percentofall

theunemployedhavebeenunemployedforsixmonthsorlonger.Andweknowtheconsequencesofthatcanbeverydistressing,

becausepeoplewhoareoutofworkforalongtime,theirskillstendtoatrophy;theylosecontactswith--withthe

labormarket,withtheirotherpeopleworking,thenetworksthattheyhavebuiltup.

AndwesawintheEuropeanexperience,forexample,in


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the'80sand'90s,thataperiodofhighunemploymentwith

verylong-termunemploymentspellscanactuallyunemploymenttoremainveryhighforaprotractedperiod.

Soitisaverysignificantconcern.Andit'soneofthe

reasonsthat--thattheFederalReservehasbeensoaggressive.Bygettingunemploymentdown,wehopetobring

backtoworksomeofthepeoplewho'vebeenoutofworkaslongastheyhaveandinthatrespecttrytoavoidthelonger

termconsequencesofpeoplebeingoutofworkformonthsatatime.

Sowe--that'spartofthereasonthatwe'vebeenasaggressiveaswehave.

Asthesituationdragsonandasthelong-term

unemployedloseskillsandlosecontactwiththelabormarketorperhapsjustbecomediscouragedandstoplookingforwork,

thenitbecomesreallyoutofthescopeofmonetarypolicyatthatpoint,jobtraining,education,andothertypesof

interventionswouldprobablybemoreeffectivethanmonetarypolicy.

QUESTION:(inaudible)thelong-termunemploymentscenenow,doyouthinkisthatoutofthescopeofwhattheFed

cando?

BERNANKE:Well,indirectly,ofcourse,totheextentthatwecanhelptheeconomyrecoverandhelpjobcreation

proceed,thensomeofthepeoplewhogetjobswillbethosewho'vebeenoutofworkforalongtime.

BERNANKE:Thatbeingsaid,wedon'thaveanytoolsfor

targetinglong-termunemploymentspecifically.Wejust--can

justtrytomakethelabormarketworkbetterbroadlyspeaking.

QUESTION:LastweekStandard&Poor'sputUnitedStates

debtonanegativewatchfortheveryfirsttimeever.Whatisyourreactiontothat?Andareyouconcerned,areyou

worriedthattheUnitedStatesisgoingtoloseitsAAAcreditrating?

BERNANKE:Well,inonesense,S&P'sactiondidn'treally

tellusanything,becauseeverybodywhoreadsthenewspaper

knowsthattheUnitedStateshasaveryseriouslong-term


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fiscalproblem.

Thatbeingsaid,I'mhopefulthatthis--thisevent

willprovideatleastonemoreincentiveforCongressandtheadministrationto--toaddressthisproblem.

Ithinkit'sthemostimportanteconomicproblem,at

leastinthelongerterm,thattheUnitedStatesfaces.Wecurrentlyhaveafiscaldeficitwhichissimplynot

sustainableoverthelongerterm.Andifit'snotaddresseditwillhavesignificantconsequencesforfinancial

stability,foreconomicgrowth,andforourstandardof

living.

Itisencouragingthatweareseeingeffortsonbothsidesoftheaisletothinkaboutthisissuefromalong-run

perspective.It'snotaproblemthatcanbesolvedbymakingchangesonlyforthenextsixmonths.It'sreallyalong-run

issue.

We'restillalongwayfromasolution,obviously,butitis,Ithink,ofthehighestimportancethatourpolitical

leadersaddressthisverydifficultproblemasquicklyandas

effectivelyastheycan.

BERNANKE:AndtotheextentthattheS&Pactiongoadsaresponse,Ithinkthat's--that'sconstructive.

QUESTION:Inthepast,therehavebeentimeswhenfiscal

policyhastightenedandtheFederalReservehaschosentoeaseitspolicyandresponsepartlytothat,givenwhatever

thecircumstancestheeconomywereatthetime.

Congressappearsintentatthispointoncutting

spendingsignificantly;mightrestraintheeconomy,asitappearstobedoinginBritainwherethey'refollowinga

similarpath.

IsthereanythingtheFedcanorshoulddoifindeedtherearelargebudgetcutssometimeinthenext18months?

BERNANKE:Well,first,letmesaythataddressingthe

fiscaldeficit,particularlythelongrununsustainabledeficit,isatoppriority,andnothingIwouldwanttosay

would--wouldbe--shouldbeconstruedassayingthatI

thinkit'sanythingotherthanatoppriority.It'svery


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importantthatourleadersaddressthis--addressthis

issue.

Iwouldalsosaythatthecutsthathavebeenmadesofardon'tseemtoustohadverysignificantconsequencesfor

short-termeconomicactivity.

Now,mypreferenceintermsofaddressingthelong-termdeficitistotakealong-termperspective.It'salong-term

problem.IfCongressandtheadministrationareabletomakecrediblecommitmentstocuttingprogramsor--orintheway

changingthefiscalprofilegoingforwardoveralongperiod

oftime,thatisthemostconstructivewaytoaddresswhatisinfactalong-runproblem.

BERNANKE:If--ifthechangesarefocusedentirelyon

theshortrun,thentheymighthavesomeconsequencesfor--forgrowth,andinthatcasetheFederalReserve,whichis,

asalways,goingtotrytosetmonetarypolicytomeetourmandate,wouldtakethoseintoaccountappropriately.Butso

far,I'venotseenanyfiscalchangesthatreallychangedour--ournear-termoutlook.

QUESTION:Thankyou,Mr.Chairman.

I'dliketoaskabouttheuncertaintiesintheglobaleconomyor(inaudible).InminutesfromtheMarchmeeting,

thecommitteenotedthatthedevelopmentinJapanincreaseduncertainties.Sowhat'sthelatestassessmentonthat--on

thoserisksoruncertaintiessuchastragedyinJapanorcrisisinEuropeanduprisingintheMiddleEast?Andwhat

wouldbetheimpactofthoseontheU.S.economyandtheworldeconomy?

BERNANKE:Well,oneofthethingsthatourprojectionsinclude,we'reonlyproducingtheforecasttoday.Withour

minutesinthreeweeks,we'llincludethefull,detailedprojectionsaswenormallydo.Oneofthethingsthatwe

includeistheviewsoftheparticipantsontheamountofuncertaintythereisintheforecastgoingforward.

AndIthinkIcansaywithouttoomuchfearofgiving

awaythesecretthatFOMCparticipantsdoseequiteabitofuncertaintyintheworldgoingforward.Andalotofthat

uncertaintyiscomingfromglobalfactors.I'vealready

talkedaboutMiddleEastern,NorthAfricadevelopments,which


22/27

haveaffectedoilprices;conditionsinemergingmarkets,

whichhaveaffectedcommoditypricesandotherthings.TheEuropeansituationcontinuesandwe'rewatchingthatvery

carefully.

Now,obviously,youaskedaboutJapan.Letmefirstsay,youknow,thatI'vehadalotofcontactwithmyJapanese

counterparts--CentralBankGovernorShirikawaandotherpeopleintheJapanesegovernment.Wecollaboratedwiththem

ontheforeignexchangeintervention,asyouknow.AndweareveryadmiringofthecourageoftheJapanesepeoplein

respondingtothesesituationsandofthe--oftheCentral

BankofJapanhasdoneagoodjobinprovidingliquidityandhelpingtostabilizefinancialmarketsinwhatarevery,very

significantdisturbancesto--totheeconomy.

BERNANKE:TheimplicationsforJapanhavebeendiscussedatsomelength,andIthinkGovernorShirakawarecently

talkedaboutthem.Inthenearterm,therewillprobablybeadeclineinJapaneseoutputreflectingthedestruction,

reflectingelectricityproblems,etcetera.

Webelievethatwillberelativelytemporaryandthat

theeconomywillstarttocomeback,but,ofcourse,thisisamajorblow,anditwilltakealotofeffortonthepartof

theJapanesepeopleto--torestoretheeconomyandtorecoverfromthedamagethatwasdonebythe--bythe

tragedy.

FortheUnitedStates,wearelookingatthisverycarefully.Thusfar,themainimpactoftheJapanese

situationonU.S.economyhasbeenthroughsupplychains.

We'venotedsomeautomobilecompanies,forexample,that

havehaddifficultygettingcertaincomponentswhicharemanufacturedmostlyorentirelyin--inJapan.Andthathas

ledanumberofcompaniestoannouncethattheywouldrestrainproductionforatime.Sotheremaybesomemoderate

effecton--ontheU.S.economy,butweexpectittobemoderateandtobetemporary.

Again,themostimportantissuehereistherecoveryof

Japan,andourgoodwishesgoouttotheJapanesepeopleandtheireffortstoovercometheadversitythatthey'refacing.

QUESTION:Mr.Chairman,youhaveoftenstressed,as


23/27

indeedyoudidagaintoday,theimportanceofkeeping

inflationexpectationslowandstable,tokeepinflationitselfundercontrol.

BERNANKE:But,irrespectiveofinflationaryexpectations

orpsychology,isn'titpossiblethattheFed'spoliciescouldbeprovidingthemonetarytinderforinflation,the

longertheycontinue?

Well,we--weviewourmonetarypoliciesasbeingnotthatdifferentfromordinarymonetarypolicy.

Imean,it'struethatwe'veusedsomedifferenttools,butthosetoolsareoperatingthroughfinancialconditions

andwehavealotofexperienceunderstandinghowfinancialconditions--changesininterestrates,changesinstock

pricesandsoon--howtheyaffecttheeconomy,includingbothgrowthandinflation.

Sowearemonitoringthestateoftheeconomy,watching

theevolvingoutlook.Andourintention,asisalwaysthecase,istotightenpolicyattheappropriatetimetoensure

thatinflationremainswellcontrolled,thatwemeetthat

partofourmandate,whiledoingthebestwecantoensure,also,thatwehaveastableeconomyandasustainable

recoveryinthelabormarket.

Sotheproblemisthesameonethatcentralbanksalwaysface,whichischoosingtheappropriatepathof--of

tighteningattheappropriatestageoftherecovery.It'sdifficulttogetitexactlyright,butwehavealotof

experienceintermsofwhataretheconsiderationsandtheeconomicsthatunderliethosedecisions.

Soweanticipatethatwewilltightenitatthe--attherighttime,andthatwewilltherebyallowtherecovery

tocontinueandallowtheeconomytoreturntoamorenormalconfigurationatthesametimekeepinginflationlowand

stable.

QUESTION:ManyofthecommercialpartnersoftheUnitedStatesareveryconcernedabouttheevolutionofyourforeign

exchangerate.Ifinonehypotheticalcasethedollarwouldsinktoanot-tolerablelevelwhichwouldharmverymuchthe

U.S.economyandtheprospectfortheglobaleconomybecause

itaffectstheconfidenceofsomanypeople,wouldyou


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considerchangingyourmonetarypolicyinaccordancetothat

threat?

BERNANKE:Well,asIsaidearlier,wedobelievethatastrongandstabledollarisintheinterestoftheUnited

Statesandisintheinterestoftheglobaleconomy.

Ourviewisthatthebestthingwecandoforthedollaris,first,tokeepthepurchasingpowerofthedollarstrong

bykeepinginflationlowandbycreatingastrongereconomythrough--throughpolicieswhichsupporttherecoveryand,

therefore,causemorecapitalinflowstotheUnitedStates.

Sothosearethekindsofpolicies,Ithink,thatinthe

mediumtermwillcreatetheconditionsforanappropriateandhealthylevelofthedollar.

SoIdon'tthinkIreallywanttoaddressa

hypothetical,whichIreallydon'tanticipate,becauseIthinkthatthepoliciesthatweareundertaking,

notwithstandingshort-termfluctuations,willleadtoastrongandstabledollarinthemediumterm.

QUESTION:Thisisthatrarenewsconferencethatactuallymakesnewsbeforeithappens.Canyoutalkalittle

bitaboutyourdecisiontotakethishistoricstepofholdinganewsconferenceafteraFedmeeting--whyyouclosetodo

it,whatanxietiesyoumayhavehadaboutdoingit,andhow,say,facingthemediacomparestofacingCongress?

BERNANKE:Thanks,Mom.

(LAUGHTER)

Well,theFederalReservehasbeenlookingforwaystoincreaseitstransparencynowformanyyears,andwe'vemade

alotofprogress.

BERNANKE:Itusedtobethatthemystiqueofcentralbankingwasallaboutnotlettinganybodyknowwhatyouwere

doing.Asrecentlyas1994theFederalReservedidn'teventellthepublicwhenitchangedthetargetforthefederal

fundsrate.

Sincethen,wehavetakenanumberofsteps,astatement

with--includesavote.Wehave--weproduceverydetailed


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minutes,whicharereleasedonlythreeweeksafterthe

meeting,whichisessentiallyaproductionlag.

Wenowprovidequarterlyprojections,includinglongrunobjectives(ph)aswellasnear-termoutlook.Wehave

substantialmeansofcommunicatingthroughspeeches,testimonyandthelike.

Andsowehavebecome,Ithink,avery--avery

transparentcentralbank.

Thatbeingsaid,wehadasubcommitteeheadedbythe

vicechairoftheboard,JanetYellen,lookingforyetadditionalstepstotaketoprovideadditionaltransparency

andaccountability.Andthepressconferencewas--camerighttothetop,becausethisisanarea,firstofall,

whereglobalcentralbankpracticeincludes--nowmanycentralbanksdousepressconferencesandwehavesome

experiencewiththem.

Andsecondly,itdoesprovideachanceforthechairman,inthiscase,toprovidesomeadditionalcolorandcontext

forboth--inthiscaseboththemeetingandtheprojections

thatarebeingmadebythe--bythecommittee.

Sowethoughtitwasanaturalnextstep.We'renot--we'renotdone.We'recontinuingtolookforadditional

thingsthatwecandotobemoretransparentandmoreaccountable.Butwethinkthisistherightwaytogo.AndI

personallyhavealwaysbeenabigbelieverinprovidingasmuchinformationasyoucantohelpthepublicunderstand

whatyou'redoing,tohelpthemarketsunderstandwhatyou'redoing,andtobeaccountabletothepublicforwhatyou're

doing.

BERNANKE:Now,ofcourse,theFeddidn'tdothisfora

longtime,andIthinkthecounter-argumenthasalwaysbeenthatif--therewasariskthatthechairmanspeakingmight

createunnecessaryvolatilityinfinancialmarkets,ormaynotbenecessary,givenalltheothersourcesof--of

informationtocomeoutoftheFederalReserve.

Itwasourjudgmentafterthinkingaboutthisforsometimethatatthispoint,theadditionalbenefitsfrommore

information,moretransparency,meetingthepressdirectly

outweighedsomeofthese--someoftheserisks.AndIthink


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overtime,youknow,we'llexperimenttotrytomakesure

thatthisisaseffectiveavenueaspossible.

QUESTION:KenRogoffandCarmenReinhartwroteabooklookingat800yearsoffinancialhistoryanddiscoveredthat

whenyouhaveafinancialcrisis,ittakesalotlongerfortheeconomytorecover.Arepeopleexpectingtoomuchfrom

theFederalReserveintermsofhelpingtheeconomyrecover?Andhasthatcomplicatedyourmonetarypolicy-making?

BERNANKE:Well,letmejustsayfirstthatKenRogoff

wasagraduateschoolclassmateofminesoI'veknownhimfor

alongtime.Ievenplayedchessagainsthim,whichwasabigmistake.AndIenjoyedthatbookverymuch.Ithoughtitwas

veryinformative.Andasyousay,itmakesthepointthatasanhistoricalmatterthatrecoveriesfollowingfinancial

crisestendtoberelativelyslow.

Now,whatthebookdidn'treallydo,though,wasgiveafullexplanationofwhythatisthecase.Certainly,partof

ithastodowiththeproblemsincreditmarkets.MyownresearchwhenIwasinacademiafocusedagreatdealonthe

effectsofproblemsincreditmarketsonrecoveries.Other

aspectswouldincludetheeffectsofcreditproblemsonareaslikehousingandsoon.Andwe'reseeingallthat,ofcourse,

in--inoureconomy.

But,thatsaid,anotherpossibleexplanationfortheslowrecoveryfromfinancialcrisesmightbethatpolicy

responseswerenotadequate.Thatthey--thattherecapitalizationofthebankingsystem,therestorationof

creditflowsandmonetaryandfiscalpolicieswerenotsufficienttoget--togetasquickarecoveryasmight

otherwisehavebeenpossible.

Andso,youknow,wehaven'tallowedthatto--that

historicalfacttodissuadeusfromdoingallwecantosupportastrongrecovery.

Thatbeingsaid,itisarelativelyslowrecovery,and

youcanidentifyreasonsforthat.Imean,creditfactorsareone.Anotherveryimportantfactoristhat,youknow,this

wastriggeredbyabubbleinthehousingmarket,andthehousingmarketremainsveryweak.Andundernormal

circumstances,construction,bothresidentialand

nonresidential,wouldbeabigpartoftherecoveryprocess.


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Andsothereareanumberoffactors.Andnowwe'reseeinghighoilpricesandotherthings.Thereareanumber

offactorswhichareholding--whichareholdingtherecoveryback.

Sotherearegoodreasonsforwhytherecoveryisslower

thanwewouldlike.Atthesametime,it'sveryhardtoblametheAmericanpublicforbeingimpatient.

Conditionsarefarfromwherethey--wherewewould

likethemtobe.Thecombinationofhighunemployment,high

gaspricesandhighforeclosureratesisa--isaterriblecombination.Alotofpeoplearehavingaverytoughtime.

SoIcancertainlyunderstandwhypeopleareimpatient.

AndIguesstheonlythingIcansayisthatwhiletherecoveryprocesslookslikelytocontinuetobearelatively

moderateone,comparedtothedepthsofthe--oftherecession,Idothinkthatthepacewillpickupovertime.

BERNANKE:AndIamveryconfidentthat,inthelongrun,

thattheU.S.willreturntobeingthemostproductive,one

ofthefastest-growinganddynamiceconomiesintheworld.

Andithasn'tlostanyofthebasiccharacteristicsthatmadeitthepreeminenteconomyintheworldbeforethe

crisis.AndIthinkwewillreturntothatstatusaswerecover.

Thankyouverymuch.Andthankyouforcoming.

END

transcript of bernanke apr 272011 presser

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