WASHINGTON (AP) — There is still not enough spending and investment to sustain the economic recovery, Federal Reserve Chairman Ben Bernanke said Thursday.
Bernanke said consumer demand remains weak relative to its level before the Great Recession. He noted that other contributors to economic growth — including borrowing and trade — have declined.
“Consumer spending has not … recovered. It’s still quite weak relative to where it was before the crisis,” Bernanke said in the second of four lectures he is giving to George Washington University students this month. “We lack a source of demand to keep the economy growing.”
His comments provided further insight into the reasoning behind the Fed’s plan to hold short-term interest rates near zero through 2014. The central bank has stuck with that timetable despite three months of strong job growth and other signs of economic improvement.
Many economists believe that Fed officials will not make any changes in policy at their next meeting on April 25-26 and will only ease credit conditions if the economy slows further.