Bernanke tells lawmakers Feds timetable for slowing its bond purchases not on

AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Bernanke tells lawmakers Fed’s timetable for slowing its bond purchases not on a preset course by Martin Crutsinger, The Associated Press Posted Jul 17, 2013 8:49 am MDT WASHINGTON – Ben Bernanke said Wednesday that the U.S. economy is gradually improving but emphasized that the Federal Reserve is not locked into any timetable for scaling back policies aimed at jolting growth.The Fed chairman told Congress there is no “preset course” and that any decision to reduce its $85 billion-a-month bond-buying program will depend on how the economy performs. And he said that the Fed could maintain or increase those purchases if it sensed the economy was weakening.The bond purchases have kept long-term interest rates low and encouraged more borrowing and spending.The U.S. economy is getting a lift from the recovering housing market and steady hiring, Bernanke said. But it is being held back by domestic spending cuts and slower growth abroad. The Fed is also closely monitoring inflation, which has fallen below the Fed’s 2 per cent target.“Because our asset purchases depend on economic and financial developments, they are by no means on a preset course,” he told the House Financial Services Committee during the first of two days of testimony this week on the Fed’s semi-annual report. He will appear Thursday before the Senate Banking Committee.His testimony helped stocks edge higher. The Dow Jones industrial average rose 19 points to close up at 15,470. Broader indexes also gained on the day.The yield on the benchmark 10-year Treasury note fell to 2.49 per cent, down from 2.55 per cent before Bernanke’s comments were made public.Bernanke’s remarks were his latest attempt to calm markets, which have gyrated wildly since the Fed’s June meeting.Last month stocks plunged after Bernanke said the Fed could slow the bond purchases later this year and end them next year if the economy strengthens. Since them, Bernanke and other Fed members have stressed that any change in policy depends on improvement in the job market and economy, not a target date. That has helped push stocks to new highs.On Wednesday, Bernanke stuck closely to that more dovish tone. He noted that the job market has made some progress but the Fed wants to see “substantial progress” before reducing the bond buys.“Despite these gains, the job situation is far from satisfactory,” he said.Bernanke also said the Fed plans to keep its benchmark short-term interest rate near zero as long as unemployment is above 6.5 per cent. And the Fed could hold the rate down even after it falls below 6.5 per cent, he said, particularly if unemployment declines because more people are leaving the workforce. The government counts people as unemployed only if they are actively looking for a job.The job market has accelerated since the bond buying began in September. Employers have an average of 202,000 jobs a month this year, up from 180,000 in the previous six months. Still, unemployment remains high at 7.6 per cent, and economic growth has been weak for the past three quarters.Bernanke has said that he thought the unemployment rate would be about 7 per cent when the bond buying program ends.“What Bernanke did today is try to contain the damage from what was a communication misstep in June and I think he succeeded,” said Brian Bethune, an economics professor at Gordon College in Wenham, Mass. “The Fed in June saw that even the smallest hint of a change in Fed policy can turn out to be extremely powerful in terms of its impact on financial markets.”Bethune predicts the Fed will hold off on any policy change in September because there will not be enough data to show that economic growth has strengthened. Bethune said the earliest the Fed could announce a reduction in the bond purchases would likely be December.Still, other economists believe the Fed is still on track to slow them in September.Paul Dales, senior U.S. economist for Capital Economics, said Bernanke’s remarks did not alter that view. Of course, Dales said Bernanke made it clear that any change would depend heavily on the economy’s health.“We don’t think this forward guidance could be much clearer,” Dales said.Bernanke spent a good part of the three-hour hearing addressing other topics beyond the Fed’s low interest rate policies:— He reminded lawmakers that their fiscal policies are having an adverse effect on the economy. Higher taxes and deep federal spending cuts could reduce growth by 1.5 percentage points this year. Bernanke said the impact of those policies should begin to wear off in the second half of this year, but there was a risk that the damage could linger.— He warned that a failure by Congress to approve an increase in the borrowing limit sometime this fall could be harmful to the economy and unsettling to financial markets.— He said regulators have more work ahead to put the 2010 financial overhaul law into effect. Additional rules must be written to reduce the risk of financial firms collapsing and bringing down the financial system. Thanks to the overhaul rules that have been put in place, that possibility is less likely, but the threat “is not gone,” Bernanke said.. read more

UN urges fasttrack approach to end AIDS epidemic by 2030

By June 2014, some 13.6 million people had access to antiretroviral therapy, which UNAIDS says is a huge step towards ensuring that 15 million people have access by 2015, but still a long way from the fast-track targets. Efforts are particularly needed to close the treatment gap for children.The report also underscores that investment is critical to achieving the targets. As such, low-income countries will require a peak of $9.7 billion in funding in 2020, and lower-middle-income countries will need $8.7 billion. Furthermore, international funding support will be needed to supplement domestic investments, particularly in low-income countries, which are currently only funding about 10 per cent of their responses to HIV through domestic sources, UNAIDS said. Upper-middle-income countries will require $17.2 billion in 2020. In 2013, 80 per cent of upper-middle-income countries were financing their responses to HIV through domestic sources.“If we invest just $3 dollars a day for each person living with HIV for the next five years we would break the epidemic for good,” Mr. Sidibé stressed. “And we know that each dollar invested will produce a $15 return,” he added.If sufficient investments are achieved, global resource needs will start to reduce from 2020. By 2030, the annual resources required in all low- and middle-income countries will decline to $32.8 billion, down 8 per cent from the $35.6 billion needed in 2020. These resources will provide antiretroviral treatment to twice as many people in 2020 than in 2015, according to the report.In 2013, UNAIDS estimates that 35 million people globally were living with HIV, while 2.1 million people became newly infected with the virus and 1.5 million people died from AIDS-related illnesses.The report was launched earlier today at the University of California, Los Angeles (UCLA). Mr. Sidibé was joined by actress Charlize Theron, UN Messenger of Peace and Founder of the Charlize Theron Africa Outreach Project. The Fast-Track The report, Fast-Track: ending the AIDS epidemic by 2030, outlines a set of targets that would need to be reached by 2020, including 90-90-90: 90 per cent of people living with HIV knowing their HIV status; 90 per cent of people who know their HIV-positive status on treatment; and 90 per cent of people on treatment with suppressed viral loads.“We have bent the trajectory of the epidemic,” said Michel Sidibé, Executive Director of UNAIDS in a press release. “Now we have five years to break it for good or risk the epidemic rebounding out of control.”The fast-track approach emphasizes the need to focus on the counties, cities and communities most affected by HIV, and recommends that resources be concentrated on the areas with the greatest impact.In particular, the approach highlights that efforts are needed in the 30 countries that together account for 89 per cent of new HIV infections worldwide. To fast-track national responses in these 30 priority countries will require extensive mobilization of human, institutional and strategic international partners, as well as significant commitments from both national and international sources, UNAIDS said. Other targets include reducing the annual number of new HIV infections by more than 75 per cent, to 500,000 in 2020, and achieving zero discrimination.Adhering to the targets would mean that nearly 28 million new HIV infections would be averted by 2030, UNAIDS said. read more