US Fed to keep monetary policy to growth

The U.S. Federal Reserve intended to continue with its ultra-loose monetary policy to bolster the nation's economic growth and reduce unemployment rate, Federal Reserve Chairman Ben Bernanke said on Thursday. The central bank's dual mandates of price stability and maximum employment were generally complementary, Bernanke said in his testimony before the Senate Banking Committee, adding that with the unemployment rate elevated and the inflation outlook subdued, the Fed held that sustaining a "highly accommodative stance for monetary policy" was consistent with promoting both objectives. He cited the prediction of members of the Federal Open Market Committee (FOMC), the Fed's monetary policy making body, that the U.S. economy would expand by 2.2 to 2.7 percent this year. Bernanke stressed that the U.S. central bank has decided to keep the exceptionally low levels of federal funds rate at least through late 2014 to boost economic recovery, an ultra-loose monetary stance taken by the Fed since December 2008. However, Bernanke admitted the limitations of monetary policy in reducing the high unemployment rate, saying that the maximum level of employment in an economy was largely determined by non- monetary factors that affected the structure and dynamics of the labor market.