Fed's Bernanke-US current acct gap not sustainable WASHINGTON, Feb 5 (Reuters) - Federal Reserve Board
Governor Ben Bernanke said on Thursday that the large U.S.
current account deficit would have to be reduced over time.
"The United States is currently running about a five
percent of GDP current account deficit and that's not
indefinitely sustainable," he told the South Carolina
Association of Investment Professionals Economic Forecasting luncheon in Columbia, South Carolina. "There are going to have to be adjustments over time to bring that down to a more acceptable level. I believe those will happen...that is clearly part of the transition process the economy is going to have to make over the next three to five years," he said.
((Writing by Alister Bull, Washington newsroom, 202-8988300))
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DJ Fed's/Bernanke -2: "The Fed Has The Luxury Of Waiting"
By Michael S. Derby Of DOW JONES NEWSWIRES
COLUMBIA, S.C. (Dow Jones)--Low inflation has given the Federal Reserve the "luxury" to be patient before raising interest rates from their current historically low levels, Federal Reserve Governor Ben Bernanke said Thursday. Speaking at a luncheon hosted by the South Carolina Association of Investment Professionals, Bernanke also said trends in productivity are key to the outlook for the labor market.
"The Fed has the luxury of waiting," because of low inflation, Bernanke said, in comments that echo last week's policy statement from the Fed's Open Market Committee. Bernanke indicated the central bank isn't seeing glimmers of inflation anywhere on the economic horizon, despite the weaker dollar and rallying commodity prices.
Noting that inflation was "very hard to forecast", Bernanke said the deflation fears that spooked bond market participants last year have subsided a lot, adding that the Fed also believes inflation will remain "contained."
He said the economy has come through a rough patch and is much better placed for the type of balanced recovery that draws on corporate as well as household spending.
Bernanke specifically rebuffed some conventional wisdom that says multi-year highs in commodity prices are indicative of inflation brewing in the pipeline. |
