U.S. Federal Reserve Chairman Ben Bernanke testifies on the central bank's Semiannual Monetary Policy Report before the Senate Banking, Housing and Urban Affairs committee on the Capitol Hill in Washington D.C., capital of the United States, Feb. 26, 2013. (Xinhua/Zhang Jun)
While unemployment rate still remains high in the Untied States, the country's central bank needs to provide support to the anemic economic recovery, U.S. Federal Reserve Chairman Ben Bernanke said on Tuesday.
U.S. economic activity has continued to expand at a "moderate" pace, and conditions in the labor market have been improving gradually, Bernanke said while delivering the central bank's Semiannual Monetary Policy Report to the Senate Banking, Housing and Urban Affairs committee.
About 4.7 million of the unemployed have been without a job for six months or more, and millions more would like full-time employment but are able to find only part-time work, Bernanke noted.
"High unemployment has substantial costs, including not only the hardship faced by the unemployed and their families, but also the harm done to the vitality and productive potential of our economy as a whole," he stressed.
"With unemployment well above normal levels and inflation subdued, progress toward the Federal Reserve's mandated objectives of maximum employment and price stability has required a highly accommodative monetary policy," the central bank chief told U.S. lawmakers.
In the current economic environment, the benefits of the Fed's large-scale asset purchase programs are "providing important support to the recovery," argued Bernanke, hinting that the current easy monetary policy will continue.
Starting in January, the Fed is purchasing 85 billion U.S. dollars of Treasury debt and agency mortgage-backed securities ( MBS) every month to drive down long-term borrowing costs and stimulate economic activity.
Since the onset of the financial crisis, the Fed has completed two rounds of such quantitative easing programs, dubbed as QE1 and QE2. It has bought more than 2 trillion dollars of U.S. government debt, agency MBS and other assets. These programs have attracted sharp criticism both at home and abroad.
