Bernanke: Next interest rate hike in 2014 is ‘best guess’

The Federal Reserve’s announcement that the nation’s central bank is unlikely to raise its benchmark interest rate until late 2014 is simply its “best guess,” Chairman Ben Bernanke says. He made clear during a news conference today the decision to leave interest rates unchanged for three more years is not ironclad. The ability of the Fed to forecast that far out is limited, Bernanke says, and it could adjust the time frame for when it will raise rates if economic conditions change. “Unless there is a substantial strengthening of the economy in the near term, it’s a pretty good guess we will be keeping rates low for some time,” Bernanke said, following a two-day policy meeting. The central bank has kept its key rate at a record low near zero for about three years. Bernanke says the Fed has not ruled out bolder steps to boost economic growth, such as a third round of bond purchases. “I would not say we are out of ammunition. We still have tools,” he says. Bernanke refused to answer a question about whether he would resign if one of his Republican critics is elected president. “As long as I have a job to do, I’m going to do everything to help the Federal Reserve. That’s my answer,” he responded. The Associated Press has the full story here.