Set to depart his leadership post, Federal Reserve Chairman Ben Bernanke has outlined ways the central bank can do a better job, including how the Fed can still improve communication and supervision.
In his outlook speech to the American Economic Association in Philadelphia, Bernanke said: "The economy has made considerable progress since the recovery officially began some four and a half years ago."
But it wasn't all roses. He noted that "the recovery clearly remains incomplete" with the unemployment rate at 7 percent. He also said the Fed "has tended to be overoptimistic" in forecasting growth during the recovery, while "too pessimistic in our forecasts of the unemployment rate."
Even with the shortcomings, Bernanke looks for the progress to continue. "The combination of financial healing, greater balance in the housing market, less fiscal restraint and, of course, continued monetary policy accommodation, bodes well for U.S. economic growth in coming quarters," he said.
As the U.S. chief central banker who inaugurated regular news conferences, Bernanke says the Fed still can work to be more transparent. "The Fed must continue to find ways to navigate this changing environment while providing clear, objective and reliable information to the public," he said.
Last month, the Federal Reserve announced that large-scale asset purchases, aimed at boosting growth, would be reduced come January 2014. During this speech, Bernanke again sought to provide assurances that the Fed will be careful to keep the economy from floundering. "The FOMC's decision to modestly reduce the pace of asset purchases at its December meeting did not indicate any diminution of its commitment to maintain a highly accommodative monetary policy for as long as needed."
Vice Chair Janet Yellen is poised to succeed Bernanke beginning Feb. 1. A vote by the full U.S. Senate is expected Monday. Expressing confidence about the future, Bernanke said, "Although the Fed undoubtedly will face some difficult challenges in the years ahead, our people and our values make me confident that our institution will meet those challenges successfully."
What kind of grade would you give Ben Bernanke for his work as Fed Chairman? What do you think about Janet Yellen?
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