This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Bernanke: Stimulus Hinges On Sustained Improvement

By MARTIN CRUTSINGER

WASHINGTON (AP) â¿¿ Federal Reserve Chairman Ben Bernanke said Wednesday that even though the U.S. economy has improved in recent months, the Fed won't alter its aggressive stimulus policies until it is convinced the gains can be sustained.

During a news conference after the Fed's two-day policy meeting, Bernanke repeated that the Fed plans to keep its key short-term interest rate near zero until unemployment is below 6.5 percent. But he noted that 6.5 percent is a "threshold," not a "trigger."

He also said the central bank may vary the size of its monthly bond purchases depending on whether and how much the job market improves. It is currently spending $85 billion a month to help lower long-term rates.

The unemployment rate has fallen to a four-year low of 7.7 percent, among many signs of a healthier economy.

"We are seeing improvement," Bernanke said. "One thing we would need is to see this is not temporary improvement."

The Fed's commitment to its low-interest rate policies drove stock prices higher Wednesday. The Standard & Poor's 500 index rose 10 points Wednesday end the day up at 1,558 â¿¿ a few points shy of its record close of 1,565 on Oct. 9, 2007.

Bernanke downplayed concerns that the Fed's stimulus policies are inflating stock prices.

"We don't see at this point anything that is out of line with historical patterns," said Bernanke. He noted that it is not surprising to see stocks rise given optimism about the economy and strong earnings reports.

Bernanke, whose second four-term term as Fed chairman ends in January 2014, also avoided answering questions about whether he would consider staying on for a third term. His predecessor, Alan Greenspan, served as Fed chairman for more than 18 years.

Bernanke said that he had discussed the issue with President Barack Obama "a bit." But he did not reveal any specifics from that discussion.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,704.46 +26.23 0.15%
S&P 500 2,057.62 +1.47 0.07%
NASDAQ 4,882.1770 +18.8150 0.39%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs