Some smart money is betting that there will be more accommodation to lower interest rates and get more people working. After all, it is an election year. Federal Reserve Chairman Ben Bernanke is defending the central bank’s policy of very low interest rates. Verbally believes that “further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.”
Bernanke is concerned about long-term unemployment, which he said could cause workers to lose key skill sets, but he argued against the notion that much of the problem was due to shifts in the economy that had made workers’ skills obsolete. Indeed, much of the problem could reside with ineffective education – low high school graduation rates and poor college education choices. However, Bernanke believes the biggest problem is low demand due to debt contraction.
Related Information in Prosperity View
- Unemployment Correlated With Happiness – Steven Kaplan: Implications for Education and Personal Growth
- The Relationship of Unemployment and Education Level and Implication for Economic Recovery
- Quantitative Easing – Interest, Inflation Rate Tradeoff
- Dollar will Drop so Don’t Invest in Dollar Assets – Marc Faber
- A Liquidity Trap – Monetary Policy Unable to Stimulate the Economy
- High Unemployment Expected To Keep Interest Rates Low
- Reduce Anger and Increase Happiness with Education
- Our Unemployment Rate – Do We Have a Structural Jobs Problem?