Former Fed Chairman Ben Bernanke has defended low interest rates on a blog which he has only just launched. His remarks supported his successor Janet Yellen, who has kept the benchmark rate at nearly zero.
Ex-Fed chief Ben Bernanke launched a blog Monday which appeared to be aimed at serving him as a new pulpit from which to defend the policy of low interest rates to kick-start the economy, a policy he followed throughout his tenure at the Fed.
"Now that I'm a civilian again, I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers," Bernanke said on his blog, which is hosted by the Washington-based Brookings Institution.
Particularly in the waning days of his Fed chairmanship, critics had accused Bernanke for helping to "throw seniors under the bus" in an allusion to the impact continuously low interest rates might have on the retirement income of diligent savers.
But on his blog, Bernanke insisted that "ultimately, the best way to improve the returns attainable by savers was to do what the Fed actually did – keep rates low so that the economy could recover and more quickly reach the point of producing healthier investment returns."
Bernanke's remarks came in defense of his successor, current Fed Chairman Janet Yellen, who has kept the benchmark federal funds rate low.
The Fed is expected to begin tightening its interest rate policy later this year, with Bernanke remarking that "the state of the economy, not the Fed, ultimately determines the real rate of return attainable by savers and investors."
hg/nz (Reuters, AFP)