Kai Ryssdal: Federal Reserve Chairman Ben Bernanke crossed the Potomac River today into Arlington, Va., for a speech today. The National Association for Business Economics -- a fairly influential crowd.
And as happens pretty much every time he opens his mouth, Mr. Bernanke made news. To whit, that the Fed will keep on keeping interest rates low until the economy is growing again. Growing strongly, to be precise.
We'll know that's happening, he said, when we see a lot more job growth than we're getting now. As usual, the Fed chairman didn't come right out and say that. There was jargon about "continued accommodative policies" involved.
So we asked Marketplace's Mitchell Hartman to translate.
Mitchell Hartman: The Fed has kept short-term interest rates near-zero to get the economy to grow faster. Cheap money makes it easier to buy houses and cars and factory equipment.
And the policy seems to be working. Unemployment’s down to 8.3 percent. That makes some investors think the Fed won’t keep interest rates low through the end of 2014, as promised.
So, the first thing Bernanke had this to say was this:
Ben Bernanke: The better jobs numbers seem somewhat out of sync with the overall pace of economic expansion.
Economist Nigel Gault at IHS Global Insight says that means Bernanke doesn’t think companies are hiring because they’re in a great mood. Instead, they got spooked back in the recession and laid too many people off.
Nigel Gault: So maybe it’s catch-up hiring by companies, and maybe it isn’t indicating that the trend growth of the economy is about to take off.
Bernanke worries that job creation could still slow down.
Bernanke: Further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.
"Continued accommodative policies" -- that means Bernanke thinks the Fed has to keep interest rates low and pump more money into the economy, until at least the end of 2014.
One final word from Bernanke -- don’t worry too much about inflation. There’s no sign employers have to pay higher wages to attract workers. That’s a message we don’t need a Fed-speak translator for.
I’m Mitchell Hartman for Marketplace.