According to Federal Reserve Chairman Ben Bernanke, the U.S. unemployment rate will probably not hit 6% until 2016.
With the promise of QE continuing until the labor market does “improve substantially”, does this mean QE3 could remain for at least three years? Here is the Fed’s statement from September: “If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.” (Federal Reserve)
The Fed has also stated that they will keep interest rates low until unemployment reaches about 6.5%.
Thursday’s U.S. unemployment claims figure was 344K, 17K less than it’s forecast.
The Dollar is experiencing some weakness right now, but it could potentially turn around. Bernanke does speak again Friday morning.
For more information on what Bernanke spoke of the past few days, visit this article on the potential costs of risk-taking.
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