chairman Ben S. Bernanke moved the Federal Reserve further into uncharted policy territory in combating joblessness by tying the bankâ€™s interest-rate outlook to unemployment and inflation, while committing to an even faster expansion of the central bankâ€™s balance sheet.
The actions on the eve of the Fedâ€™s centenary year underscore Bernankeâ€™s hallmark commitment to experimentation and forceful action, derived in part from his research showing too little monetary stimulus produced large economic costs for the U.S. in the 1930s and for Japan in the 1990s. He called the current state of the labor market, with unemployment at 7.7 percent, â€śan enormous waste of human and economic potentialâ€ť and said the benefits of more bond buying outweigh the potential risks.
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