WASHINGTON — Employment has been increasing at a healthy clip for the last few months, but the Federal Reserve is not ready to relax just yet.
“We need to see sustained improvement,” the Fed’s chairman, Ben S. Bernanke, said at a news conference on Wednesday. “One or two months doesn’t cut it. So we’re just going to have to keep providing support for the economy and see how things evolve.”
The Fed’s policymaking committee said much the same thing in a stilted statement issued just before Bernanke took questions, announcing that it would continue to hold down short-term interest rates and buy $85 billion a month in Treasurys and mortgage-backed securities.
Bernanke’s remarks suggested that the Fed would reduce its asset purchases if job growth continued at the current pace, the first time he has said that the central bank is likely to reduce the amount of monthly purchases before it stops buying entirely.
But such a change remains at least a few months away, and quite possibly longer. The Fed is wary of pulling back too soon, a mistake it has already made several times in recent years. It is waiting to assess the effect of the federal spending cuts that began this month.
And Bernanke said the members of the Federal Open Market Committee, which makes policy for the Fed, “have not been able to come to an agreement” about the goals of the asset purchases or, by extension, when they should end. Bernanke, who has made job growth the Fed’s top priority for the first time in its 100-year history, spoke about the issue in personal terms. Asked when he last had spoken to an unemployed person, he said that one of his own relatives was out of work.
The Fed said last year that it planned to hold short-term interest rates near zero at least as long as the unemployment rate remained above 6.5 percent. The rate stood at 7.7 percent in February and has barely budged in half a year. Most economic forecasters do not expect the threshold to be reached before 2015.