WASHINGTON (MNI) – The following is the transcript of a response of
Federal Reserve Chairman Ben Bernanke to a question during his Thursday
afternoon news conference:

Bernanke: It’s pretty hard to give you a number, but
I can — I can certainly confirm as the reserve bank presidents
and governors made their reports today and yesterday around the
table, there was considerable discussion of uncertainty
including policy uncertainty, fiscal policy uncertainty and the
implications of that for hiring and investment decisions. A lot
of — a lot of firms are waiting to see whether — whether that
problem will be resolved. And if so, how? And I think it is a
concern. It is something that is affecting behavior now. But
again, I don’t know — I don’t have a number. I don’t know how
big that effect is but certainly the sooner that can be
resolved, sooner can be clarified it will be beneficial not just
because we avoid the cliff itself but because we clarify for
firms, for employers and investors how that’s going to be
resolved. So I think it’s — it’s an issue that is of some
consequence, yes.

—

Bernanke: We take the economy as we find it. There are a lot
of head winds right now that are affecting the economy. There’s
fiscal head winds, there’s international factors including the
situation in Europe. There’s factors arising from still
impaired credit markets and so on. So we looked at that —
looked at the economy from the perspective of, you know, how
quickly it’s been growing over the last six months to a year and
as I talked about in a speech in March — in order for
employment gains to be sustained for unemployment to fall, the
economy needs to grow at or above trend levels. And lately it’s
not really been at trend. So we’ve been responding to that
problem, and trying to take steps that will ensure somewhat
stronger growth and we hope will help bring unemployment down
over time.

Now, again, the fiscal cliff, the uncertainty of the fiscal cliff
one of the factors one of the head winds but I’m sure there’s many
others and we don’t try to differentiate among them in any sense. If the
fiscal cliff does occur, I suspect it won’t and I hope it won’t but if
it does, and we get the kind of impact the congressional budget office
is talking about, as I’ve said, I don’t think the federal reserve has
the tools to offset that and we would have to rethink it at that point.
But we’ve taken the steps we’ve taken now because we’d like to see the
economy gather more momentum and the more momentum it has, the better
placed we are to deal with any shocks that might come down the road.

** MNI Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$]