Ben Bernanke, the chairman of America’s Federal Reserve, last week moved to quell rising fears of a double-dip recession by pledging to take whatever measures are necessary to sustain economic recovery.
Speaking at the annual conference of central bankers in Jackson Hole, Wyoming, he said the Fed would do “all that it can to ensure the continuation of the economic recovery”. Should America’s recovery falter, policies are available to provide additional stimulus.
“Any deployment of these options requires a careful comparison of benefit and cost,” he said. “However, the Committee will certainly use its tools as needed to maintain price stability – avoid excessive inflation or further disinflation – and to promote the continuation of the economic recovery.” (article continues below)
Fears had been growing about America’s poor economic performance following a spate of weak macroeconomic data. These included figures on house sales, orders on durable goods and a downward revision of second quarter GDP figures from an annual rate of 2.4% to 1.6%.
But Bernanke expects the American economy to expand in the second half of 2010 and to grow into 2011.
Bernanke said: “For much of the world, the task of economic recovery and repair remains far from complete. In many countries, including the United States and most other advanced industrial nations, growth during the past year has been too slow and joblessness remains too high.”
Before Bernanke gave his speech, the Survey of Consumers from the University of Michigan showed that, despite media talk of a double-dip recession, consumers did not panic in August.