Bernanke Will Raise the Interest Rate When the Time Is Right


Ben Bernanke outlined his plan for scaling back the Federal Reserve's stimulus programs today, which included raising the interest rate back above near zero, which is where it has been since January 2008, in order to contain inflation. However, the Fed Chairman would not be pinned down on a date for such an occurrence.

"Although at present the U.S. economy continues to require the support of highly accommodative monetary policies, at some point the Federal Reserve will need to tighten financial conditions by raising short-term interest rates and reducing the quantity of bank reserves outstanding. We have spent considerable effort in developing the tools we will need to remove policy accommodation, and we are fully confident that at the appropriate time we will be able to do so effectively.”

You see, it's complicated — there are multiple signs Dr. Green Shoots is waiting for, signs that only he can see, including but not limited to the wheat being yea high and a comet streaking across the midsummer night's sky. But at least he didn't say, "How about never? Is never good for you?"

Federal Reserve's exit strategy [Federal Reserve]