ONE MIGHT accuse Federal Reserve Chairman Ben S. Bernanke of many shortcomings, including misjudging the depth and timing of the nation’s economic slowdown. But intellectual dishonesty is not one of them. While fighting the Great Recession with unprecedented near-zero interest rates and Fed balance-sheet expansion, Mr. Bernanke has consistently acknowledged that he is navigating uncharted waters, and that, while his policies have both costs and benefits, neither can be measured with ideal precision. He has insisted that monetary policy is no panacea, and that Congress, too, will have to do its part by setting a stable long-term fiscal policy.
Mr. Bernanke repeated many of those points at his news conference Thursday after the Fed announced further monetary easing. The central bank will buy mortgage-backed securities at a rate of $85 billion per month through the rest of the year, and then $40 billion per month until the labor market “improves substantially,” while explicitly extending super-low interest rates through mid-2015. The open-ended commitment was new, and aggressive. Mr. Bernanke said that the Fed was acting because unemployment remains stubbornly high amid docile inflation.