WASHINGTON, July 17 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke affirmed Wednesday that current monetary policies would remain in place "for the foreseeable future."
Bernanke rattled equity markets in mid-June by commenting the central bank, depending on economic conditions, could taper off its $85 billion per month quantitative easing program, possibly ending the program in 2014.
On Wednesday, in a semiannual presentation before the House Committee on Financial Services, Bernanke said in prepared remarks that unemployment was still too high "and declining only gradually." In addition, "with inflation running below the [Open Market] Committee's longer-run objective, a highly accommodative monetary policy will remain appropriate for the foreseeable future."
Bernanke said a recovery in the housing market was contributing to the recovery, but conditions in the labor market were still recovering gradually.
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While pulling back on the message that monetary policy could change soon, Bernanke noted the central bank's Open Market Committee predicted economic gains would accelerate in the next two years.
"Most participants saw real gross domestic product growth beginning to step up during the second half of the year, eventually reaching a pace between 2.9 percent and 3.6 percent in 2015," he said.
The Fed's policy makers also projected the unemployment rate would decline to between 5.8 percent and 6.2 percent by the end of 2015.
But for now the quantitative easing program would remain intact, he said.
"We are using asset purchases and the resulting expansion of the Federal Reserve's balance sheet primarily to increase the near-term momentum of the economy, with the specific goal of achieving a substantial improvement in the outlook for the labor market in a context of price stability," he said.
"We have made some progress toward this goal, and, with inflation subdued, we intend to continue our purchases until a substantial improvement in the labor market outlook has been realized," the Fed's chairman added.
