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cooper chung international hong kong news l Bernanke defends

cooper chung international hong kong news l Bernanke defends

HONG KONG (CNNMoney) -- Federal Reserve Chairman Ben Bernanke defended the central bank Sunday, insisting that its actions had not hindered economic growth in developing countries. Fed policies -- especially continued quantitative easing -- have been criticized by some in the international community who say the actions are distorting currency markets and capital flows in emerging economies. Officials in some of those markets -- including China -- have voiced concern that the Fed's easy-money policies have the potential to create asset bubbles, currency appreciation and inflation. Guido Mantega, Brazil's finance minister, has beenparticularly critical of the Fed, alleging it has contributed to a "monetary tsunami" that is hindering growth. The Fed announced last month that it would embark on a third round of bond-buying stimulus. The policy, known as quantitative easing and often abbreviated as QE3, entails buying $40 billion in mortgage-backed securities each month. But Bernanke argued Sunday that those policies are not to be blamed for trouble in emerging markets. "It is not at all clear that accommodative policies in advanced economies impose net costs on emerging market economies," the Fed chief said during a speech in Tokyo, Japan. Bernanke said that capital flows are influenced by many factors, and changes cannot be attributed wholesale to the monetary policy choices of developed economies. Instead, policymakers in the developing world have great influence over capital flows, Bernanke said. Bernanke then went further, saying that the systematic devaluation of currencies in some emerging markets have made those countries more susceptible to inflation risk. "The perceived advantages of undervaluation and the problem of unwanted capital inflows must be understood as a package -- you can't have one without the other," Bernanke said. Related: Market wants QE4. Fed should say no. Bernanke did not specifically name any countries in his speech, but China has been consi

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U.S. economy, world's engine, remains in "neutral": Fed's Fi

U.S. economy, world's engine, remains in "neutral": Fed's Fi

Source page: http://www.reuters.com/article/2013/03/07/us-usa-fed-fisher-idUSBRE92604D20130307 (Reuters) - Despite the efforts of the U.S. Federal Reserve to use easy monetary policy to boost jobs, the country's economy is stuck in "neutral" more than three years after the end of the recession, a top Fed official said on Wednesday. "It is not possible to create jobs through monetary policy alone," Dallas Fed President Richard Fisher said at a World Affairs Council of San Antonio event. "The U.S. remains the economic engine of the world ... it's not China, it's not Europe, it's the U.S., and the U.S. remains in neutral." Fisher, repeating a well-worn analysis of the limits of the Fed's super-easy monetary policies, said the U.S. central bank did not have the power to pull the economy from its standstill as long as U.S. lawmakers did not do their part. "You know how horrid things are in Washington," Fisher said. "We have provided fuel for an economic recovery because Congress and the executive have not provided the incentives for growth." The U.S. central bank has kept interest rates at rock bottom for more than four years and is currently buying Treasury and mortgage bonds in an effort to keep longer-term borrowing costs low enough to spur spending and hiring. Yet unemployment is relatively high, at 7.9 percent, and inflation remains stubbornly below the Fed's 2 percent target, curtailing the boost that near-zero short-term interest rates can give the economy. Fisher, who does not vote on the Fed's policy-setting committee this year, has been a vocal opponent of the Fed's bond-buying program, saying it can do little as long as lawmakers do not address the nation's debt problem and provide businesses with needed fiscal certainty. U.S. political leaders have so far failed to bridge a dispute over the budget, triggering broad spending cuts that both political parties deplore and setting the stage for fiscal tightening that could drag economic growth down sharply. <ID:

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