Ben Bernanke offered a full-throated defense of the Fed’s recent actions in a speech in Frankfurt today, saying the $600 billion quantitative easing plan was essential to reducing joblessness. “On its current economic trajectory, the United States runs the risk of seeing millions of workers unemployed or underemployed for years,” he said. “As a society, we should find that outcome unacceptable.” Keeping the US economy chugging, he argued, is vital for the global economy.
It was a departure from the Fed chair’s usually reserved tone, the Washington Post notes. He addressed criticisms from Germany and China that the move was an attempt to manipulate the dollar, saying that improving the strength of the US economy was vital to the dollar’s long-term strength. At the same time he blasted China for its own currency manipulation, the Wall Street Journal reports. Bernanke said China’s “strategy of currency undervaluation” was overheating its economy, and leading to an unsustainable “two-speed” recovery.