Ben Bernanke

A new stimulus program may be adopted by the United States, Federal Reserve Chairman Ben Bernanke told Congress Wednesday. Bernanke noted that additional asset purchase plan is in the works.

The head of the central bank said that the economy is growing more slowly than expected, and should that continue the central bank stands at the ready with more accommodative measures.

On Wednesday the US Federal Reserve cut its forecast for the economic growth while it didn’t suggest any further monetary easing saying the recovery would eventually pick up through 2012.

Ben Bernanke said that while such factors as high commodity prices which impact the economy should be fleeting, still the recovery would feature some weakness.

"Part of the slowdown is temporary and part of it may be longer lasting," Bernanke told a news conference after a two-day Fed policy meeting.

Jim Rogers, chief executive of Rogers Holdings, warned this week that the United States is approaching another ruinous crisis worse than that of 2008.

"The debts that are in this country are skyrocketing," he said. "In the last three years the government has spent staggering amounts of money and the Federal Reserve is taking on staggering amounts of debt.

Last week officials of the Federal Reserve were holding intense talks on developing exit strategies. According to the sources familiar with the matter the policymakers divided over to sell billions of dollars assets first or raise the interest rate.

The discussion was more robust than described by the Fed Chairman Ben Bernanke at the news conference on April 27. At that time Bernanke said the committee "continued its ongoing discussion of the available tools for removing policy accommodation…”

Federal Reserve chairman Ben Bernanke said this week that a recent spike of inflation is driven mainly by rising commodity prices across the globe and it is unlikely stay persistent.

These comments are in sharp contrast to other US central bank officials who believe the time is coming for the Fed to begin tightening monetary policy.

Earlier Atlanta Fed President Dennis Lockhart also said that inflation would probably remain moderate.

Ben Bernanke said this week that spending cut plan promoted by Republicans would not significantly hurt US economic growth but may cost around 200,000 jobs over two years. The figure differs from 700,000 cited by Democrats but still it is opposite forecasts of job gains Republicans have pointed to.

Bernanke said that a $60 billion cut along the lines being pursued by Republicans in the House of Representatives would likely trim growth by around two-tenths of a percentage point in the first year and one-tenth in the next year.

Ben Bernanke, chairman of the US Federal Reserve, said that the central bank supports the Dodd-Frank financial regulatory overhaul and is moving swiftly to put its provisions into action.

"Dodd-Frank is a major step forward for financial regulation in the United States," Bernanke said in congressional testimony on Wednesday.

Bernanke is due to speak about regulation before the Senate Banking committee on Thursday. His prepared text made no mention of the outlook for the economy or monetary policy.
 

Bullion depreciated after holdings on the ETF slipped again. Still a weaker dollar could provide support after Federal Reserve Chairman Ben Bernanke said he has no plans to scrap a massive bond-buying program.

Spot gold lost $1.05 an ounce to $1,361.84 an ounce by 0041 GMT, well below a lifetime high around $1,430 an ounce hit in December.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings slipped to 1,226.436 tonnes by Feb. 9, their lowest since late January, from 1,228.560 tonnes on Feb. 8.

Federal Reserve Ben Bernanke made a positive outlook for the US economy yet he stopped short of saying that everything will be super good through the year as jobless rates will unlikely contract substantially.

"We see the economy strengthening. It has looked better in the last few months. We think a 3 to 4 percent-type of growth number for 2011 seems reasonable," Bernanke said at an event sponsored by the Federal Deposit Insurance Corporation.

Responding to the much criticism poured by the public on the central bank’s action to inject more money into the US economy, Federal Reserve Chairman Ben Bernanke sated that a long period of high unemployment could exact a steep social cost.

Meanwhile, Minneapolis Fed President Narayana Kocherlakota said the Fed's controversial bond purchase program was needed given a "troubling" slowdown in U.S. economic growth and too low inflation and employment.

Robert Wolf, the CEO of UBS Americas, talking to CNBC said that the Federal Reserve President Ben Bernanke has “done a fantastic job,” and that quantitative easing [QE] may be good for the country after all.

“I was probably a little skeptical about QE2, when they announced it,” said Wolf, adding that he thought it was an “export initiative” to get the US dollar “low.”

The Chairman of the US Federal Reserve Ben Bernanke tried to downplay the potential adverse effect of the central bank’s new debt purchase. He said that aggressive monetary policy will not spark unwanted inflation in the future.

The Fed chief explained that the bigger risks facing the country right now are an unemployment rate that remains too high and inflation readings that are uncomfortably low.

In Monday trades the gold moved up 1% from its 2-½ week low hit last Friday on the heels of weakened dollar while investors wait for the U.S. Federal Reserve Chairman Ben Bernanke to speak later in the day.

The Group of 20 finance ministers agreed on Saturday to shun competitive currency devaluations but stopped short of setting targets to reduce trade imbalances, and struck a surprise deal to give emerging nations a bigger voice in the International Monetary Fund.

 According to the Chairman of Federal Reserve Ben Bernanke the inflation can be too low, a risk unseen in decades.

“There are clearly many challenges in communicating and conducting monetary policy in a low-inflation environment, including the uncertainties associated with the use of nonconventional policy tools,” Bernanke said during a speech at the Federal Reserve of Boston.

During a meeting of a top central bankers and bank regulators a new set of rules was proposed to help the global banking industry avert future financial disasters. While the new regulation is meant to wrestle potential threats it could also dampen bank profits and strain weaker institutions.

On Sunday the panel of financial authorities from 27 countries had reached agreement. The group includes Ben S. Bernanke, chairman of the Federal Reserve, and Jean-Claude Trichet, president of the European Central Bank.