WASHINGTON (MNI) – Following are excerpts of the transcript from
Federal Reserve Chairman Ben Bernanke’s press conference:
QUESTION
First, assume that you’re not constrained by the zero nominal bound
right now; what would the federal funds rate be, even if it were a
negative number? And do you believe you’re at the equivalent degree of
monetary accommodation today using non conventional tools?
And also a quick supplemental. Could you put some numbers on the
meaning of exceptionally low federal funds rates. For example, would 1%
federal funds rate qualify as exceptionally low at the end of 2014?
ANSWER
Well the exact reading for the federal funds rate today, in the
absence of a nominal bound , would depend a lot on which particular
rule, what particular model that you use. I don’t want to cite a
particular number, but it probably would be negative. And in that
respect, we’re trying to compensate for that by the use of non standard
tools, including, as you know, almost a $3 trillion balance sheet.
We see monetary policy as being approximately in the right place at
this point based on the analysis that we’ve been doing of the economy
and the outlook. That doesn’t mean we might not take further action. We
are certainly prepared to take further action, but for the time being,
it appears that we are more or less in the right place.
(..)
One of the reasons that the language in the statement is sometimes
a little vaguer than you’d like is because we’re trying to get a
consensus among 17 or at least 10 people. And different members or
participants in the FOMC might have somewhat different views of what
exceptionally low means.
Personally I think it means something close to where we are now.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$]