Bernanke as quantitative easing defend, implied stimulus unchanged

According to Reuters, February 26, the U.S. Federal Reserve Board (Fed) Chairman Ben Bernanke, monetary policy hearings in Congress on the Fed's monetary stimulus strong defense that maintain an accommodative monetary policy benefits greater than its risks, easing concerns about the financial markets debt purchase plan the Fed may be early exit.

Boosted by the news Tuesday, the three major U.S. stock indexes rose, gold prices also rose 1.8%, to return above $ 1,600 / ounce, marking the biggest one-day gain this year.

Bernanke said in testimony at the hearing, said Fed policy makers are aware of the potential costs and risks of highly accommodative monetary policy could trigger inflation or asset bubbles, but these risks do not seem serious, and the Federal Reserve have the confidence and ability to promptly withdraw the monetary stimulus at the appropriate time.

When asked about the Fed's easing policy will push global currency devaluation, Bernanke is clearly replied, "We did not participate in the currency war!"

Bernanke argued that since July last year, the U.S. non-farm jobs average monthly increase of 175,000, the unemployment rate fell by 0.3 percentage points over the same period to 7.9 percent, the private sector created 6.1 million jobs in the past three years, unemployment peak rate in 2009 fell by two percentage points, but the U.S. unemployment rate is still higher than the normal level, and there are still 4.7 million people of more than six months of unemployment, which will damage the vitality and growth of the U.S. economy, driving down the fiscal revenue expenditure, resulting in the current budget deficit and substantial government liabilities.

On the inflation front, despite the recent gasoline price increases affect the family budget, but the overall level of inflation in the United States is still very low. In the second half of 2012, the U.S. personal consumption expenditure price index, the annualized growth rate of 1% to 1.5%, consistent with the growth rate in the first half. Taking into account the fluctuation range of longer-term inflation expectations in the United States over the past few years are not large, the Federal Open Market Committee is expected medium-term inflation rate will be 2% of the first-line fluctuations, even below the 2% target, which also provides for a loose monetary policy a certain amount of space.

SW macroeconomic researcher Xie Weiyu to the "Daily Economic News" reporter, said, "From the current point of view, at least within this year, the possibility of the Fed exit QE is not large, because the U.S. job market is still very weak, but not much to raise the possibility in the future. risk-based fiscal policy, the U.S. economy will be subject to a certain extent, drag Therefore, we will this year, the expected value of the U.S. GDP from 2.2% down to 1.6%, but the overall recovery trend is still not change. "

Automatic cut public spending into the next focus /

In his testimony, Bernanke with optimism for the future of the U.S. economy reported, but he also warned that, although monetary policy is to promote a more robust recovery, but you can not take on the responsibility to ensure that the economy recover faster, regardless of from short-term or long-term point of view, the performance of the economy still depends on the process of fiscal policy. It also makes automatic cut public spending to become the next focus of attention in the market.

The end of last year, Democrats and Republicans reached a temporary agreement on "fiscal cliff, cut public spending will be fully automatically postponed to March 1 this year, but as the deadline approaches, the attitude and position of the two parties are still firm, the Republicans do not accept any The tax increase proposal, while the Democratic Party is opposed to relying solely on cuts in government spending to reduce the deficit.

Bernanke board budget cuts will harm the recovery, it is recommended that the installments to reduce the deficit, short-term easing of long-term efforts to strengthen.