Federal Reserve Chairman Ben S. Bernanke and his fellow policy makers, expressing concern that federal budget cuts are blunting the recovery, signaled little appetite for reducing record stimulus without what he called “real and sustainable” progress in reducing unemployment.
“What we are looking for is increased confidence that the labor market is improving and that that improvement is sustainable,” Bernanke told lawmakers yesterday. “And as we see that, we will in steps respond to that by reducing the amount of accommodation in a way that’s appropriate.”
Bernanke’s testimony to the Joint Economic Committee of Congress and comments by Federal Reserve Bank of New York President William C. Dudley showed caution over trimming the central bank’s bond purchase program too soon. The burden is on the economy to show durable job gains in the face of falling government spending, they said. Many Fed officials said more labor market progress is needed before paring $85 billion in monthly asset purchases, minutes of their last meeting showed yesterday.
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