BERNANKE OUR EXIT STRATEGY IS TO NOT EXIT

 

BERNANKE "THE NEW EXIT STRATEGY IS NOT TO EXIT.  IN FACT, IF THAT WORKS AS WELL AS WE EXPECT OUR NEXT EXIT STRATEGY IS TO DOUBLE UP ON ASSET PURCHASES.  HOW BOUT THEM APPLES?" 

BREAKING NEWS Bloomberg.com

Bernanke Says Fed May Decide Not to Sell Securities

By Caroline Salas Gage & Joshua Zumbrun - Feb 27, 2013 4:24 PM ET

Federal Reserve Chairman Ben S. Bernanke said the central bank may decide to hold bonds on its $3.1 trillion balance sheet to maturity as part of a review of its strategy for an exit from record monetary easing.
Bernanke told lawmakers in Washington today that he expects to revisit “sometime soon” an exit plan that policy makers outlined in June 2011.

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Federal Reserve Chairman Ben S. Bernanke is the third policy maker in the last week to voice support for altering the central bank’s exit strategy to delay or eliminate asset sales. Photographer: Andrew Harrer/Bloomberg 

“The one thing we could do differently” is “hold some of the securities a little longer,” Bernanke said in response to questions from members of the House Financial Services Committee. “We could even let them just run off.” 

Bernanke is the third policy maker in the last week to voice support for altering the central bank’s exit strategy to delay or eliminate asset sales. Governor Jerome Powell said Feb. 22 that the Fed could refrain from sales to avoid causing market disruptions and having the Fed take losses on the securities as interest rates rise.

San Francisco Fed President John Williams told reporters after a Feb. 21 speech in New York that, given the increase in the Fed’s balance sheet, the period of time over which it’s appropriate to sell assets “probably has lengthened.” Telling markets the Fed plans to hold assets for longer would strengthen monetary stimulus and be “beneficial to the economy,” he said.