Nevertheless, the thrust of Bernanke’s remarks was to make clear that the Fed was shifting more toward a “QE3” program than indicated in Bernanke’s press conference in April. He announced that the Federal Reserve was considering “more securities purchases,” adding that “prudent planning requires that we evaluate the efficacy” of “deploying additional stimulus.”
Bernanke acknowledged that economic conditions had worsened significantly since his last report to Congress in March 2011. Since that time, the unemployment rate has climbed 0.4 percentage points, the ranks of the unemployed have swelled by half a million, and the one-year inflation rate has hit its highest level since late 2008. In response to these figures, Bernanke concluded, “There is uncertainty about whether there is a durable recovery.”
How they must laugh at us!