Federal Reserve Chairman Ben S. Bernanke, decrying the suffering caused by unemployment of more than 8 percent and defending his unprecedented policies, said more bond purchases are an option as central bankers weigh further steps to spur growth.
â€œThe costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant,â€ Bernanke said today in a speech to central bankers and economists at an annual forum in Jackson Hole, Wyoming.
Stocks and Treasuries climbed as investors increased bets the Fed will expand its record stimulus. Bernanke, speaking two weeks before the next meeting of the Federal Open Market Committee, said long periods of high unemployment produce â€œenormous suffering and waste of human talentâ€ and also risk causing â€œstructural damage on our economy that could last for many years.â€
The Standard & Poorâ€™s 500 Index advanced 0.8 percent to 1,410.50 at 11:55 a.m. in New York. The yield on the benchmark 10-year Treasury note fell to 1.59 percent from 1.62 percent late yesterday.
â€œGiven Bernankeâ€™s remarks, additional monetary stimulus seems more likely than it did,â€ said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. â€œIt is not 100 percent, and the timing is an even greater question.â€
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