WASHINGTON The following are highlights from Federal Reserve Chairman Ben Bernanke's press conference on Wednesday after the central bank's monetary policy committee meeting. This is the first regularly scheduled press conference by a Fed chief.
In a statement following the meeting, the Fed said it would finish its $600 billion bond-buying program in June as scheduled, and repeated its plans to keep interest rates low for an "extended period."
ON FED TRANSPARENCY, ACCOUNTABILITY:
"It used to be that the mystique of central banking was all about not letting anybody know what you're doing. As recently as 1994 the Federal Reserve didn't even tell the public when it changed the target rate for the federal funds rate.
"Many central banks do press conferences -- we have some experience with them -- and it does provide a chance for the (Fed) chairman to provide additional context and color for both the meeting and the projections provided by the committee.
"The counter-argument has always been there was a risk that the chairman speaking might create unnecessary volatility in financial markets or may not be necessary given all the other sources of information coming out of the Federal Reserve.
"It was our judgment that at this point the additional benefits from more information, more transparency, meeting the press directly, outweigh some of these risks."
ON RECOVERY BEING SLOW:
"It is a relatively slow recovery. You can identify reasons for that. The credit factor is one, another very important factor is that this was triggered by a bubble in the housing market and the housing market remains very weak. Under normal circumstances, construction, both residential and nonresidential will be a big part of the recovery process. Now we are seeing higher oil prices and other things. The combination of high unemployment, high gas prices and high foreclosure rates is a terrible combination, a lot people are having a tough time. I can certainly understand why people are impatient. While the recovery process looks likely to continue to be a relatively moderate one compared to the depth of the recession, I do think the pace will pick up over time."
ON IMPACT OF JAPANESE DISASTER ON THE U.S.:
"For the United States we are looking at this very carefully, thus far, the main impact of the Japanese situation on the U.S. economy has been through supply chains. We have noted some automobile companies that have had difficulty getting certain components which are manufactured mostly or entirely in Japan. That has led some companies to announce that they will restrain production for a time. So there may be some moderate effect on the U.S. economy. We expect it to be moderate and temporary."
ON S&P ACTION ON U.S. DEBT RATING:
"In one sense S&P's action didn't really tell us anything because everyone who reads the newspaper knows, that the United States has a very serious long-term fiscal problem. That being said, I hope that this event will provide at least one more incentive for Congress and the administration to address this problem. I think it's the most important economic problem, at least in the long run, that the United States faces. We currently have a fiscal deficit that is simply not sustainable over the longer term, and if it's not addressed it will have significant consequences for financial stability, for economic growth, and for our standard of living... To the extent that the S&P action goads response, that's constructive."