Fed: US economy fragile
THE US economy is improving but remains extremely fragile, Federal Reserve chairman Ben Bernanke said yesterday.
Speaking at the Economic Club of Washington, he also reiterated the Fed’s stance that the current environment of ultra-low interest rates would persist for “an extended period”.
He noted that inflation could remain subdued but that the unemployment rate could remain high.
Markets had been concerned that last week’s extraordinarily strong jobs data would encourage the Fed to tighten monetary policy at a much faster rate than had been previously expected.
Over the last 18 months, the US central bank has cut interest rates to close to zero, and has spent $3 trillion (£1.8 trillion) on propping up the credit markets and trying to keep the economy from falling into a full-scale depression.