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Article published March 20, 2013
Fed to continue economic stimulus program
WASHINGTON — 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 — a few points shy of its record close of 1,565 on Oct. 9, 2007.