Federal Reserve Chairman Ben Bernanke countered those worried by the Fed’s decision to pump $600 billion into the economy by mid-2011, saying on Saturday that he rejected the idea that the central bank’s new plan to inject billions of dollars into the economy will spark inflation.
Speaking to a conference on the Georgia coast, Bernanke said the Fed’s decision on Wednesday to resume buying large amounts of Treasury securities won’t push inflation to “super normal” levels.
The Federal Reserve is “not in the business of trying to create inflation,” the central bank chief said. “Our purpose is to provide some additional stimulus to help the economy recover and to avoid, potentially, additional disinflation.”
Re-addressing this concern, Bernanke, who has been a vocal supporter of monetary stimulus policy over the past year, pointed out that in his mind “there is not really as much discontinuity as people think” in terms of the path the Fed is currently following.
“This sense out there, that quantitative easing or asset purchases, is some completely far removed, strange kind of thing and we have no idea what the hell is going to happen, and it’s just an unanticipated, unpredictable policy–quite the contrary. This is just monetary policy,” Bernanke said.