Uploaded on Apr 27, 2011
Chairman of the FOMC, Ben S. Bernanke
From the Federal Reserve: http://www.federalreserve.gov
High definition video available: http://www.federalreserve.gov/monetar...
CHAIRMAN BERNANKE. Good afternoon. Welcome.
In my opening remarks, I'd like to briefly first review today's policy decision. I'll then
turn next to the Federal Open Market Committee's quarterly economic projections also being
released today, and I'll place today's policy decision in the context of the Committee's
projections and the Federal Reserve's statutory mandate to foster maximum employment and
price stability. I'll then be glad to take your questions. Throughout today's briefing, my goal
will be to reflect the consensus of the Committee, while taking note of the diversity of views as
appropriate. Of course, my remarks and interpretations are my own responsibility.
In its policy statement released earlier today, the Committee announced, first, that it is
maintaining its existing policy of reinvesting principal payments from its security holdings, and,
second, that it will complete its planned purchases of $600 billion of longer-term Treasury
securities by the end of the current quarter. Of course, going forward, the Committee will
regularly review the size and composition of its securities holdings in light of incoming
information and is prepared to adjust those holdings as needed to meet the Federal Reserve's
The Committee made no change today in the target range of the federal funds rate, which
remains at 0 to ¼ percent. The Committee continues to anticipate that economic conditions,
including low rates of resource utilization, subdued inflation trends, and stable inflation
expectations, are likely to warrant exceptionally low levels for the federal funds rate for an
April 27, 2011 Chairman Bernanke's Press Conference FINAL
2 of 26
In conjunction with today's meeting, FOMC participants submitted projections for
economic growth, the unemployment rate, and the inflation rate for the years 2011 to 2013 and
over the longer run. These projections are conditional on each participant's individual
assessment of the appropriate path of monetary policy needed to best promote the Committee's
objectives. A table showing the projections has been distributed. I'm going to focus today on
the central tendency projections, which exclude the three highest and three lowest projections for
each variable in each year.
I call your attention, first, to the Committee's longer-run projections, which represent
participants' assessments of the rates to which economic growth, unemployment, and inflation
will converge over time under appropriate monetary policy and assuming no further shocks to
the economy. As the table shows, the longer-run projections for output growth have a central
tendency of 2.5 to 2.8 percent, the same as in the January survey. The longer-run projections for
the unemployment rate have a central tendency of 5.2 to 5.6 percent, somewhat narrower than in
January. These figures may be interpreted as participants' current estimates of the economy's
normal, or trend, rate of growth and its normal unemployment rate over the longer run,
respectively. The economy's longer-term rate of growth and unemployment are determined
largely by nonmonetary factors, such as the rate of growth of the labor force and the speed of
technological change, and it should be noted that estimates of these rates are inherently uncertain
and subject to revision over time.
The central tendency of the longer-run projection for inflation, as measured by the price
index for personal consumption expenditures, is 1.7 to 2.0 percent. In contrast to economic
growth and unemployment, the longer-run outlook for inflation is determined almost entirely by
monetary policy; consequently, and given that these projections are based on the assumption that...http://www.federalreserve.gov/FOMCpre...
Standard YouTube License