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Bernanke: Low Rates to Endure Long after QE Ends

Bernanke: Low Rates to Endure Long after QE Ends (Bloomberg)

Federal Reserve Chairman Ben Bernanke said yesterday, “The target for the federal funds rate is likely to remain near zero for a considerable time after the asset purchases end…” He went on to hint that the target could even endure long after the jobless rate in the United States hits 6.5 percent or lower. Policy makers are considering holding over lower rates to keep the fledgling U.S. economic recovery on track. By distancing rate hikes from quantitative-easing (QE) tapering, Bernanke likely will keep people invested in the market. Reassurances like this one from Bernanke can go a long way to assuaging investors, but will they be enough to support an economic rebirth once the $85 billion a month in support has ended?

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