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29 June 2017 17:56 (South Africa)

Bernanke cheers nation but job outlook grim, dollar needs help

Federal Reserve chairman Ben Bernanke has dived right into the national debate on the US economic recovery with a sober view of the way ahead. Bernanke's comments on the continuing weak job market, as well as his view that inflation will remain low indicate his plan to keep the reserve bank squarely focused on supporting growth by leaving interest rates at rock-bottom levels. While financial markets may be doing well and the economy expanding again, Bernanke warned that "the best thing we can say about the labour market right now is that it may be getting worse more slowly". He also spoke about the dollar's exchange rate, something Fed chairs rarely do, saying that the Fed's policies will "help ensure that the dollar is strong". This is an area of financial policy usually left to the treasury department. In doing this, Bernanke aligned himself with the Obama administration's efforts to support international confidence in the dollar. Bernanke's remarks about the dollar came after China's top bank regulator criticised the Fed's handling of monetary policy, blaming the US for creating a global bubble in asset prices. For more, read the Washington Post.

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