Ben Bernanke Assures Skeptics About $600 Billion Fed Plan

November 7th, 2010 - 8:24 pm ICT by GD  

By Meena Kar
ben-bernanke_3Nov 7, (THAINDIAN NEWS) Chairman of US Federal Reserve, Ben Bernanke has assured the public and the skeptical fed officials that the new $600 billion package to boost the economy will not lead to extraordinary levels of inflation. He said after the unveiling of the plan on Wednesday that the purpose was not to create inflation but to provide additional impetus to boost the economy and help it recover. He also said that the package will also protect the economy from potentially additional disinflation.

Several fed officials had expressed concerns about the $600 billion package saying that it could create inflation and also speculative bubbles in the prices of bonds and other commodities. Ben Bernanke was also clear about the mandates of the Central Bank and said they were committed to providing support for the economy and also providing stable, low prices and firm employment.

Ben Bernanke also explained that there has been considerable disinflation since the beginning of the economic crises and said that the people should not be satisfied with the trend which has bad employment rates on one side and a inflation trend that is sub par. This is also the motivating factor behind the new move, according to the Federal Reserve Chairman.

The new plan would see the Fed buy $600 billion of government bonds. The intent behind the move is to make the loans cheaper and get the people of America to spend more money. Many have shown skepticism about the idea saying that pumping more money into the economy could lead to unprecedented rise in inflation rates which might not be under Central Bank’s control.

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