Tuesday, April 24, 2018
Business

Ben Bernanke says Fed can do more to spur growth

JACKSON HOLE, Wyo. — Chairman Ben Bernanke sent a clear message Friday that the Federal Reserve will do more to help the still-struggling U.S. economy.

His remarks seemed to leave two questions: What exactly will the Fed do? And when?

Bernanke described the U.S. economy's health as "far from satisfactory" and noted that the unemployment rate, now 8.3 percent, hasn't declined since January.

He stopped short of committing the Fed to any specific move. But in his speech to an annual Fed conference in Jackson Hole, Wyo., Bernanke said that even with interest rates already at all-time lows, the Fed can do more.

He acknowledged critics' arguments that further Fed action could fan inflation and inject other risks. Yet after raising such arguments, Bernanke proceeded to knock them down.

Some economists predict the Fed will unveil some bold new step as soon as its Sept. 12-13 meeting, possibly a third round of bond purchases meant to lower long-term interest rates and encourage more borrowing and spending. That policy is called "quantitative easing," or QE.

In two rounds of QE, the Fed bought more than $2 trillion of Treasury bonds and mortgage-backed securities. Many investors have been hoping for a third round — a QE3.

"Bernanke has taken a further step along the path to more policy stimulus, most likely a third round of asset purchases (QE3) to be announced at the mid September FOMC meeting," said Paul Dales, senior U.S. economist at Capital Economics.

Others expect something less dramatic: a plan to keep short-term rates near zero into 2015 unless the economy improves, perhaps followed by bond purchases later.

In his speech, Bernanke acknowledged that the Fed is operating in essentially uncharted territory.

Traditionally, central banks stimulate weak economies by pushing down short-term rates. In December 2008, the Fed slashed such rates to record lows. Yet even with short-term rates as low as they can go, the economy still needs help.

Central banks can take "nontraditional" measures when they've run out of conventional ammunition. And under Bernanke the Fed has tried many. Besides embarking on two rounds of QE, the Fed has sold short-term Treasurys and replaced them with long-term Treasurys. That shift is intended to push long-term rates down further.

Bernanke argued Friday that collectively, such measures have succeeded. He cited research showing that two rounds of QE had created 2 million jobs and accelerated U.S. economic growth.

Critics have argued that besides escalating inflation later, the Fed's easy-money policies could push individuals and institutions into riskier investments. That, in turn, could destabilize the financial system.

Bernanke conceded that nontraditional policies carry risks. But he argued that these risks are "manageable." He noted that inflation remains around 2 percent despite "repeated warnings that excessive policy accommodation would ignite inflation." And he said "we have seen little evidence thus far of unsafe buildups of risk or leverage."

Comments
Shrinking supply of Tampa Bay condos and townhomes drives up prices

Shrinking supply of Tampa Bay condos and townhomes drives up prices

Sales of condos and townhomes in the Tampa Bay area jumped 9.5 percent in March, hitting a median of $156,000. The price gain was prompted in part by a supply shortage, with sales down 7.5 percent amid a dwindling inventory. Statewide, sales also lag...
Published: 04/25/18
Three artists picked to create art for St. Pete’s new pier

Three artists picked to create art for St. Pete’s new pier

ST. PETERSBURG — Pelicans will return to the pier in fanciful form.A California artist has been selected to create an enormous, red origami sculpture of a pelican that will serve as a metal perch for three more lifelike, but no less fanciful, imitati...
Updated: 6 hours ago
Career Q&A: Disillusioned with grind of telecommute

Career Q&A: Disillusioned with grind of telecommute

Q: I have become very disillusioned with my telecommuting job. I accepted this position about a year ago because I liked the idea of working from home. However, I now have so many assignments that I can barely keep up. I was recently given a huge pro...
Updated: 8 hours ago
Pinellas County commits $41.7 million to Blue Jays Stadium

Pinellas County commits $41.7 million to Blue Jays Stadium

DUNEDIN — The Pinellas County Commission pulled the final trigger Tuesday on dedicating $41.7 million in bed taxes for upgrades to the Toronto Blue Jays’ stadium and spring training facilities, a pledge that amounts to covering more than half of the ...
Updated: 10 hours ago
Florida’s small businesses need more skilled workers, survey says

Florida’s small businesses need more skilled workers, survey says

Florida small business owners say their top concern is a lack of skilled workers, according to a recent survey by the Florida Chamber of Commerce. Workforce quality has been a recurring issue for small businesses, according to previous surveys. In th...
Updated: 11 hours ago
Marriott CEO: Our three-hotel bet at Water Street Tampa reflects how Tampa is evolving

Marriott CEO: Our three-hotel bet at Water Street Tampa reflects how Tampa is evolving

TAMPA — The world’s biggest hotel company already has 29 properties in the Tampa Bay area, but its CEO says a plan to put more than 1,400 rooms in three Marriott-branded hotels within a few blocks of each other says something about how Tampa is evolv...
Published: 04/24/18
Study ranks Florida No. 8 for most aggressive drivers

Study ranks Florida No. 8 for most aggressive drivers

If you’ve ever complained about other motorists on the road, you may have been justified. The Sunshine State ranked No. 8 on GasBuddy.com’s list of states with the most aggressive drivers."Our findings indicate that states with densely populated citi...
Published: 04/24/18
First curbside delivery, now Amazon leaves packages with no one in the car

First curbside delivery, now Amazon leaves packages with no one in the car

Amazon is taking the growing curb-side delivery trend a step further — now shoppers don’t even have to be inside their cars to get their items.The online retailer announced Tuesday it has begun delivering packages to newer cars with OnStar service in...
Published: 04/24/18
Ex-Yahoo paying $35M to settle SEC charges over 2014 hack

Ex-Yahoo paying $35M to settle SEC charges over 2014 hack

WASHINGTON — The company formerly known as Yahoo is paying a $35 million fine to resolve federal regulators’ charges that the online pioneer deceived investors by failing to disclose one of the biggest data breaches in internet history. The Securiti...
Published: 04/24/18
The ‘most interesting man in the world’ will be tending bar in Tampa on Friday

The ‘most interesting man in the world’ will be tending bar in Tampa on Friday

"Stay thirsty, my friends," the most interesting man in the world is coming to Tampa to tend bar on Friday. Jonathan Goldsmith, the face that launched a thousand memes, will be slinging cocktails at Tampa’s trendy Hall on Franklin, the food hall anno...
Published: 04/24/18