Bernanke: U.S. economy emerging from recession

2009-08-22 00:20:45  

    WASHINGTON, Aug. 21 (Xinhua) --

U.S. Federal Reserve Chairman Ben Bernanke said Friday that the American economy is nearing recovery after enduring a brutal recession and severe financial crisis.

    "The world has been through the most severe financial crisis since the Great Depression. The crisis in turn sparked a deep global recession, from which we are only now beginning to emerge," Bernanke said in a speech at a Fed conference in Jackson Hole, Wyoming.

    Economic activity in both the U.S. and around the world, Bernanke said, appears to be "leveling out" and "the prospects for a return to growth in the near term appear good."

    He did warn, however, that lending is not back to normal.

    Bernanke said the policies taken by the U.S. government and the world have been effective.

    "Unlike in the 1930s, when policy was largely passive and political divisions made international economic and financial cooperation difficult, during the past year monetary, fiscal, and financial policies around the world have been aggressive and complementary," he said.

    Without the actions, Bernanke said, last October's panic would likely have continued to intensify and more major financial firms would have failed. He said the entire global financial system would have been at serious risk.

    "We cannot know for sure what the economic effects of these events would have been, but what we know about the effects of financial crises suggests that the resulting global downturn could have been extraordinarily deep and protracted," he said.

    Benanke said although the U.S. economy has avoided the worst, difficult challenges still remain.

    "We must work together to build on the gains already made to secure a sustained economic recovery, as well as to build a new financial regulatory framework that will reflect the lessons of this crisis and prevent a recurrence of the events of the past two years," Bernanke said.

    Bernanke's remarks come nearly one year after the financial crisis had deepened to the point of sending the nation into a near meltdown.

Editor: Mu Xuequan

Wall Street rallies on Bernanke's speech, home data

2009-08-22 06:29:15  

    NEW YORK, Aug. 21 (Xinhua) --

Wall Street rallied on Friday as Federal Reserve Chairman Ben Bernanke said the economy is indeed on the verge of recovery.

    At an annual Fed conference in Wyoming, Bernanke said that the prospects for a return to growth in the near term appear good.

    A bigger-than-expected jump in home sales also gave stocks a boost. The National Association of Realtors said on Thursday that home sales rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. It was the fourth straight monthly increase and the highest level of sales since August 2007. Economists had expected a rise of 2.2 percent.

    Gap Inc. advanced after reporting second-quarter profit that beat analysts' estimates.

    Meanwhile, ConocoPhillips and Exxon Mobil led energy stocks higher, as crude oil rose above 74 U.S. dollars per barrel on the New York Mercantile Exchange for the first time this year.

    The Dow Jones average rose 155.91, or 1.7 percent, to 9,505.96.The Standard & Poor's 500 index rose 18.76, or 1.9 percent, to 1,026.13, while the Nasdaq composite index rose 31.68, or 1.6 percent, to 2,020.90.     

Editor: Mu Xuequan

Dollar rises on Bernanke's comments

2009-07-22 11:15:17  

    NEW YORK, July 21 (Xinhua) --

The dollar rose against most major currencies on Tuesday after comments from U.S. Federal Reserve Chairman Ben Bernanke eased worries over inflation outlook.

    In a semiannual monetary policy testimony to the Congress, Bernanke said outlook for the U.S. economy was improving, while the economy is still fragile and supportive policies would be needed for some time to prevent rising unemployment from undercutting recovery.

    All officials of the Federal Open Market Committee (FOMC) expect that inflation will be somewhat lower this year than in recent years, and most expect it to remain subdued over the next two years, Bernanke said.

    The FOMC anticipates that economic conditions are likely to warrant maintaining the federal funds rate at exceptionally low levels for an extended period. The present focus of monetary policy remains on stimulating economic activity.

    Although an exit strategy from the present highly accommodative monetary stance won't be adopted in some time, Bernanke assured investors that the Fed has prepared such a strategy which it is ready to activate "in a smooth and timely manner" when needed.

    Strong quarterly results from Caterpillar, Coca Cola and Dupont boosted market sentiment, lifting

    Wall Street. While a profit warning from CIT Group, the largest lender to small and midsized business in U.S., refreshed worries over its bankruptcy.

    The euro bought 1.4195 dollars in late New York trading compared with 1.4221 dollars it bought late Monday. The pound fell to 1.6432 dollars from 1.6533 dollars.

    The dollar rose slightly to 1.1073 Canadian dollars from 1.1070 Canadian dollars, and fell to 1.0682 Swiss francs from 1.0693 Swiss francs. It fell to 93.63 Japanese yen from 94.23 Japanese yen.

Editor: Fang Yang

U.S. to extend relaxed monetary policy for economic recovery, says Bernanke

 2009-07-22 08:14:56  

    WASHINGTON, July 21 (Xinhua) --

The U.S. relaxed monetary policy will extend longer to foster the economic recovery, Federal Reserve Chairman Ben Bernanke said on Tuesday.

    "In light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery," Bernanke said in his semiannual monetary policy report to the Congress, "a highly accommodative stance of monetary policy will be appropriate for an extended period."

    According to the report, positive signs have shown during the first half of 2009.

    "Better conditions in financial markets have been accompanied by some improvement in economic prospects ... Although the recession in the rest of the world led to a steep drop in the demand for

    U.S. exports, this drag on our economy also appears to be waning, as many of our trading partners are also seeing signs of stabilization," he said.

    As the economy is turning better, more and more people are considering when the Fed should exit its nearly zero interest rate policy in order not to cause high inflation pressure to the economy.

    Bernanke said that despite the positive signs, the rate of job loss remains high and the unemployment rate has continued its steep rise. Job insecurity, together with declines in home values and tight credit, is likely to limit gains in consumer spending. The possibility that the recent stabilization in household spending will prove transient is an important downside risk to the outlook.

    "It is important to assure the public and the markets that the extraordinary policy measures we have taken in response to the financial crisis and the recession can be withdrawn in a smooth and timely manner as needed, thereby avoiding the risk that policy stimulus could lead to a future rise in inflation," he said.

    To promote economic recovery and foster price stability, the Federal Open Market Committee, last year brought its target for the federal funds rate to a historically low range of 0 to 1/4 percent, where it remains today.

Editor: Fang Yang