The U.S. economic recovery still needs help from the Federal Reserve despite signs of improvement, the central bank’s chairman Ben Bernanke said on Thursday.
The Fed chairman provided a modestly more rosy outlook for the world’s largest economy than he has done in recent appearances, citing gains in household spending, improved confidence, and stepped up bank lending as signs 2011 may bring stronger growth than 2010.
“Although economic growth will probably increase this year, we expect the unemployment rate to remain stubbornly above, and inflation to remain stubbornly below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate,” he said in an appearance at the National Press Club in Washington.
The event marks the second time Bernanke has spoken at the Press Club and taken questions from reporters afterwards. He said the central bank is considering holding more regular press conferences as part of improving its communications with the public.
His comments on the economy on Thursday suggest a Fed that believes it has plenty of time to let its policies boost growth and pull down a high unemployment rate before it needs to worry about tightening financial conditions to keep any inflation in check.
“We continue to see the Fed as making good on its intent to purchase $600 billion in long-term Treasury securities by the end of the second quarter,” Barclays Capital economist Michael Gapen wrote in a note to clients. “We also believe that the chairman has the votes needed to pursue further asset purchases should he think conditions warrant.”