In a rare ’60 Minutes’ interview, Federal Reserve Chairman Ben Bernanke defended the Fed’s recent controversial actions and aired concerns about the stubbornly high unemployment rate, but held onto confidence about the nation’s long-term prospects.
Even as Bernanke’s bank comes under fire from congressional Republicans for its decision to buy $600 billion in Treasury bonds as part of a second “quantitative easing” effort to encourage more private lending, he left the door open to even more purchasing if needed.
Republican leaders have taken the Fed to task on its QE2 decision, saying it will lead to inflation and a devalued dollar and will not help the economy.
But asked if the Fed would consider buying more bonds, Bernanke said, “It’s certainly possible … It depends on the efficacy of the program, it depends on inflation, and finally it depends on how the economy looks.
“The trick is to find the appropriate moment to begin to unwind this policy, and that’s what we’re going to do,” he said in an interview with CBS’s “60 Minutes.”
He pushed back against those inflation concerns, saying he was more concerned about deflation.
“We’re getting awfully close to the range where prices would actually start falling,” he said. “This fear of inflation, I think, is way overstated … We can raise interest rates in 15 minutes if we had to, so there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation. More.