U.S. interest rates have remained very low for an extended period of time and will likely stay that way for even longer, says Federal Reserve Chairman Ben Bernanke.
Lending still remains tight and unemployment rates have hit 10.2%, indicators that the economy is lagging despite having emerged from the recession.
“Significant economic challenges remain,” Bernanke said, according to Bloomberg.
“Jobs are likely to remain scarce for some time, keeping households cautious about spending,” Bernanke said.
While payrolls will increase as the economy recovers, unemployment “likely will decline only slowly if economic growth remains moderate, as I expect.”
Earlier in November, Bernanke said the Fed would keep rates low for an “extended period” of time, adding that growth would be moderate.
Unemployment rates have been the bane to the economy's recovery, according to economists.
While the economy may expand, high jobless rates will hinder the pace of recovery.
Furthermore, low interest rates have contributed to the dollar's weakening trend, which has cause concern for many nations investing in U.S. Treasuries.
Bernanke said the Fed would keep an eye on the dollar going forward although rates will stay low for now.
“Bernanke is trying to use words — not interest rates — to prevent the dollar from going even lower,” Jay Bryson, global economist with Wells Fargo Securities, told Reuters.
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