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Ben Bernanke Defends Low Interest Rates Amid Slow Growth

The Federal Reserve Chairman says his biggest concern is the nation's high unemployment rate, even as low-interest rates should speed the economic recovery.

ben bernanke

Photo: Medill DC (Flickr)

Ben Bernanke defended the Federal Reserves's latest round of quantitative easing known at QE3.

Federal Reserve Chairman Ben Bernanke defended the Federal Reserve’s ongoing effort to foster economic growth by buying mortgage-backed securities and keeping short-term interest rates low. He spoke Monday to the Economic Club of Indiana.

Bernanke says the economy is expanding, making another recession unlikely, but says it is not growing fast enough. He says the longer slow growth continues, the more unemployment problems it creates.

“The more people we’re going to have whose skills are going to atrophy, whose ability to find work is going to decline, and we’ll be creating a permanent group of people who are not fulfilling their full potential in the labor force,” he says.

Bernanke says the Fed cannot solve the problem on its own.

“Monetary policy is no panacea,” he says. “It can be used to support stronger economic growth in situations, as today, in which the economy is not making full use of its resources.”

Bernanke says other solutions include reforming the tax code, making the federal budget sustainable and expanding international trade.

Brandon Smith, IPBS

Brandon Smith, IPBS has previously worked as a reporter and anchor for KBIA Radio in Columbia, MO, and at WSPY Radio in Plano, IL as a show host, reporter, producer and anchor. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.

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