Bernanke: 2014 could be better year for US economy as finances improve, gov't restraints ease
WASHINGTON - Federal Reserve Chairman Ben Bernanke said Friday that factors which have kept the economy from accelerating appear to be abating, and he predicted stronger growth in 2014.
Americans' finances have improved and the outlook for home sales is brighter, Bernanke said. He also expects less drag from federal spending cuts and tax increases.
The combination "bodes well for U.S. economic growth in coming quarters," Bernanke said during a speech to the annual meeting of the American Economic Association in Philadelphia.
Bernanke made a similar assessment of the economy at a Dec. 18 news conference after the Fed's last meeting. At the meeting, the Fed announced it would begin in January to reduce its monthly bond purchases from $85 billion to $75 billion, noting signs of an improving economy.
The bond purchases are intended to keep long-term interest rates low and encourage more borrowing and spending.
Friday's appearance was expected to be one of Bernanke's final speeches as Fed chairman. He is stepping down at the end of this month after eight years leading the central bank.
The Senate is expected to confirm Janet Yellen Monday to be the next Fed chairman. She would take over on Feb. 1.
In his speech, Bernanke said that he tried to make the Fed more transparent and accountable while at the same time combating a deep recession and severe financial crisis.
Making the Fed more transparent was an important goal for him when he took over in 2006. He cited his participation in more television interviews, his efforts to hold more town hall meetings and his visits to universities. Bernanke also added a quarterly news conference after four of the Fed's eight policy meetings.
"We took extraordinary measures to meet extraordinary economic challenges and we had to explain those measures to earn the public's support and confidence," Bernanke said.
Bernanke said while the financial crisis has passed "the Fed's need to educate and explain will only grow."
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