Photo: The Fed
Earlier today, the Fed announced an extension to Operation Twist, a scheme whereby the Fed will buy longer-dated Treasuries, while selling the shorter ones.Then the Fed lowered its growth outlook.
Now Ben Bernanke explains everything in a press conference.
We’ll be covering it here LIVE, or you can watch the webcast here.
Full live coverage is below.
2:16 PM ET: Right now, Bernanke is just going over the specifics of the plan.
2:17 PM ET: Bernanke acknowledging weaker growth than what was seen earlier this year, but says Fed participants still see it all coming back later this year.
2:20 PM ET: Good question from Steve Liesman. Will history look back and ask if policy was too incremental…
Bernanke: This isn’t about start and stop. It’s the nature of unconventional policies. Besides, unconventional tools even work after they were announced.
2:23 PM ET: Given such a weaker outlook, why such a modest more action?
BERNANKE: There’s been a great deal of economic news since our last meeting. Data has been disappointing, but not clear what they mean, given weather.
2:25 PM ET: John Hilsenrath asks whether the Fed has done all it can, and whether it’s up to Congress.
BERNANKE: I wouldn’t accept that the Fed has no more. Non-standard measures can still help. Monetary policy can still ease financial conditions.
2:27 PM ET: Someone asks Bernanke whether he agrees with Mitt Romney that QE2 hasn’t worked.
BERNANKE: Fed is non-partisan, and QE2 worked.
2:28 PM ET: Aren’t interest rates already low enough?
BERNANKE: We can still do more. By buying Treasuries, we can push money into other assets, like corporate bonds.
2:31 PM ET: Binyamin Appelbaum of the Times asks why Bernanke isn’t doing more given how bad the economy outlook is.
BERNANKE: We are prepared to do more. Unemployment still is going down.
2:33 PM ET: Question about Europe.
BERNANKE: It’s pretty much up to Europe to do its own thing.
2:34 PM ET: Are you worried that the Fiscal Cliff is already hurting the economy by creating uncertainty.
BERNANKE: We’re not seeing much evidence yet, but it’s a real issue that this creates uncertainty.
2:39: What are the factors thwarting hiring?
BERNANKE: Europe is a problem. housing recovery. Fiscal consolidation.
2:43: Reporter asks if Fed should borrow more at long-term duration to take advantage of low rates.
BERNANKE: No, this would be reverse QE.
2:53 PM ET: Good question from Greg Ip: Inflation expectations are below the Fed’s goals. So why not do more?
BERNANKE: We might actually be wrong about how low inflation is going to be. Also, since we’re in uncharted territory we have to be more careful.
2:57: OK… most of the good questions are over. We’ll end the liveblog here but will come back in case theres something intereting.