The US Federal Reserve chairman Mr Ben Bernanke offered up no new economic stimulus measures from the central bank in a speech much-awaited by nervous markets today.
Instead, Mr Bernanke pushed the ball back to government leaders, saying they needed to act to boost jobs while not repeating the months-long political battle over spending and debt which he said disrupted the economy and financial markets.
“In the short term, putting people back to work reduces the hardships inflicted by difficult economic times and helps ensure that our economy is producing at its full potential rather than leaving productive resources fallow,” Mr Bernanke said in prepared remarks for a meeting of central bankers in Jackson Hole, Wyoming.
“Notwithstanding this observation... most of the economic policies that support robust economic growth in the long run are outside the province of the central bank.”
Mr Bernanke said he expected growth in the second half of the year to improve after a first half in which expansion was nearly stagnant, at a rate of less than one percent.
But, against deep hopes in markets that he would at least hint that the Federal Reserve would adjust monetary policies to inject a little adrenalin into the economy, Mr Bernanke stressed that the work would have to be done by politicians using admittedly tightly constrained budgetary resources.
“Although the issue of fiscal sustainability must urgently be addressed, fiscal policymakers should not, as a consequence, disregard the fragility of the current economic recovery,” he said.