Ben Bernanke Says Fed Faces a 'Tough Call' on Raising Interest Rates
08 October 2015 - 2:09AM
Dow Jones News
By Michael S. Derby And Jon Hilsenrath
NEW YORK--Ben Bernanke said Wednesday he believes it will take a
few months to gauge how much international events are affecting an
otherwise growing U.S. economy, setting up central bankers or a
difficult decision on short-term interest rate increases.
When Fed officials decided not to raise their short-term
interest rate target off near-zero levels last month--out of
caution over uncertain global events and unsettled markets--"the
decision they took was reasonable," the former Fed chairman
said.
He added that as he now sees it, "we have a pretty good domestic
expansion" that will likely withstand the "drag" now being
generated by the troubles seen in emerging markets. But at the same
time, it is a period of "uncertainty" and it could take "a few
months" to know how things play out.
Mr. Bernanke acknowledged there are clear cases to be made when
it comes to both holding rates steady and raising them. The
decision now facing Fed officials is "a tough one, absolutely," he
said. But he added "it's not something completely out of the realm
of what the Fed often has to deal with."
Mr. Bernanke spoke with The Wall Street Journal in conjunction
with the release of his book "The Courage to Act: A Memoir of a
Crisis And Its Aftermath." The book details Mr. Bernanke's
leadership of the Fed for 2006 to 2014, spanning the worst
financial downturn since the Great Depression.
Under Mr. Bernanke's reign, the Fed mounted an unprecedented
campaign of aggressive stimulus through both conventional and
unconventional channels. The Fed also drew criticism for its
involvement in bailouts of major financial institutions. His book
is in part a defense of those actions.
Write to Michael S. Derby at michael.derby@wsj.com and Jon
Hilsenrath at jon.hilsenrath@wsj.com
(END) Dow Jones Newswires
October 07, 2015 10:54 ET (14:54 GMT)
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