Federal Reserve Chairman Ben Bernanke stopped short this morning of calling for a controversial third quantitative easing program that Hub Fed President Eric Rosengren has pushed for, instead saying that the unemployment rate is a "grave concern" and leaving the door open for new policies."
The stagnation of the labor market in particular is a grave concern," Bernanke said this morning in a highly anticipated speech from Jackson Hole, Wyo. "Not only because of the enormous suffering and waste of human talent it entails, but also because persistently high levels of unemployment will wreak structural damage on our economy that could last for many years."
Though he offered no specific solution, Bernanke said the Fed will "provide additional policy accommodation as needed."
Bernanke said the housing sector has shown signs of improvement, but called the current situation "far from satisfactory" with the rate of labor market improvement continuing to be "painfully slow."
"Unless the economy begins to grow more quickly than it has recently, the unemployment rate is likely to remain far above levels consistent with maximum employment for some time," he said.
He defended the Fed's actions to stimulate the economy, saying that had the Fed not employed "nontraditional monetary policy" the recession would have been deeper.
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