WASHINGTON (AP) — The Federal Reserve does not have a specific economic target for its new stimulus program, Ben Bernanke said Thursday. He said the Fed will keep buying bonds until it sees more jobs, lower unemployment and stronger growth.
"We are looking for on-going sustained improvement in the labor market," Bernanke said during a news conference after the Fed announced a series of bold stimulus measures to get the economy moving. "There's not a specific number in mind. But what we've seen in the last six months isn't it."
The Fed said it would spend $40 billion a month to buy mortgage bonds for as long as it deems necessary to make home buying more affordable. It also extended a plan to keep short-term interest rates at record lows through mid-2015 — six months longer than previously planned. And the Fed said that it is ready to try other measures if hiring doesn't improve.
The measures were announced after the Fed concluded its two-day policy meeting.
"The weak job market is a concern to every American. High unemployment imposes hardship on millions of people and it entails a tremendous waste of human skills and talents," Bernanke said in explaining why the Fed took the steps it did Thursday.
Bernanke said the Fed is prepared to alter its plan based on how the economy performs. All Fed stimulus programs are "conditional," he said.
Some Fed regional bank presidents have spoken critically about further bond buying because of fears that it could boost inflation. But Bernanke said the 11-1 vote Thursday in favor of the new stimulus measures showed that the program enjoyed broad-based support.
Bernanke also said he expected Congress will ultimately reach a budget deal before the end of the year and avoid the looming "fiscal cliff."
"I suspect it won't and I hope it won't," Bernanke said.
If Congress cannot come to an agreement, taxes will rise in 2013 and there will be sizable across-the-board spending cuts. The Congressional Budget Office has warned that the impact of this would push the country into a recession next year.
Bernanke said if the fiscal cliff is not averted, then he did not believe any Fed action would be strong enough to offset the adverse impacts on the economy.
AP Business Writer Marcy Gordon contributed to this report.