In a speech on Wednesday, Federal Reserve Chairman Ben Bernanke addressed that the Fed’s actions are not static and will continue to change with the environment.
Bernanke spoke on the 100 years of the Federal Reserve, in addition to answering questions on the Federal Open Market Committee meeting minutes.
The Fed addressed that it will wind down its quantitative easing program; however, the standards and employment rates are only starting points for when.
"The 6.5% unemployment rate is a threshold not a trigger. It will be a time think about the situation anew," Bernanke said.
On a similar note, the most recent Federal Open Market Committee minutes from the central bank shows all participants agreed that the Committee should provide additional clarity about its asset purchase program 'relatively soon.'
In their discussion of the future state of monetary policy, the majority of members judged that the outlook for economic activity and inflation warranted the continuation of the Committee’s currently accommodative stance in order to foster a stronger economic and labor recovery.
Bernanke explained that the Federal Reserve’s mandate is to pursue maximum stability.
When asked if he would take back last month’s announcement of the Fed starting to pull back, Bernanke said he is a big believer in transparency and communication.
"You have to be consistent not opportunistic. Speaking now, we may have avoided a much more difficult situation another time," Bernanke noted.
"We have tried to provide guideposts to help the market understand when we expect policy to begin to change," Bernanke said. "As was the case prior to the crisis, essentially extrapolate the behaviors as to what the Fed would do as the economy evolves."