Bernanke says fiscal cliff already hurting economy

Published on NewsOK Modified: December 12, 2012 at 3:01 pm •  Published: December 12, 2012
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Still, the Fed took more steps Wednesday to try and help boost economic growth and lower unemployment.

After the meeting, the Fed said it would keep its key short-term interest rate near zero as long as unemployment remains above 6.5 percent and inflation stays tame. It was the first time the Fed had linked future rate increases to specific economic markers.

And in an effort to drive unemployment lower, the Fed said it will spend a total of $85 billion a month to sustain an aggressive drive to keep long-term interest rates low.

Keeping rates low encourages more borrowing and spending, which drives economic growth.

At the news conference, Bernanke said changes in the purchases will be determined by how the economy performs.

He said the Fed expects to keep purchasing bonds to support economic growth "until we see substantial improvement in the labor market."

But if the committee determines that the risks of increasing the Fed's balance sheet begin to outweigh the benefits, the purchase program will be modified, he said.