"It is important to achieve further progress, particularly in the labor market," chairman said last week
Federal Reserve Chairman Ben S. Bernanke says the U.S. economy is "far from satisfactory." His colleagues are moving to embrace policies that will stay in place until he's satisfied.
Four Fed presidents have come out in favor of an open-ended strategy for bond buying, with three calling for the program to begin now. Rather than specify a fixed amount of bonds to purchase by a certain date, such a strategy would leave the Fed able to announce a pace of purchases that it could adjust as the economy gets closer to Bernanke's goals.
"You would be able to react to the incoming data in an incremental way and not be in a situation where you have to either drop the bomb or do nothing," St. Louis Fed President James Bullard said last week during the Fed's annual monetary policy symposium in Jackson Hole, Wyoming.
Bernanke used the forum to defend unorthodox policies such as bond purchases and made the case for further action to reduce an unemployment rate that he called a "grave concern." Stocks and Treasuries jumped after the speech as investors increased bets the Fed will opt for further easing as soon as its next meeting Sept. 12-13.
"It is important to achieve further progress, particularly in the labor market," Bernanke said last week. San Francisco Fed President John Williams, Chicago's Charles Evans and Boston's Eric Rosengren have joined Bullard in endorsing open- ended bond-buying to push down an unemployment rate stuck above 8 percent for 42 consecutive months.