Diverging Debate at Fed on When to End Stimulus

WASHINGTON — The Federal Reserve Chairman, Ben S. Bernanke, said on Wednesday that the Fed was likely to extend the centerpiece of its campaign to bolster the economy — keeping short-term interest rates close to zero — even as it prepares to wind down another key stimulus program that faces mounting internal opposition.

Mr. Bernanke has begun to prepare the way for the Fed to scale back on its effort to cut borrowing costs for businesses and consumers through the monthly purchase of vast quantities of Treasuries and mortgage-backed securities. Although a growing number of Fed officials want the bond buying to end more quickly, Mr. Bernanke sought on Wednesday to emphasize that an end to bond buying would not signal a broader change in the Fed’s commitment to support economic expansion and reduce unemployment.

“The overall message is accommodation,” Mr. Bernanke told a gathering of economists in Cambridge, Mass. “There is some prospective, gradual and possible change in the mix of instruments, but that shouldn’t be confused with the overall thrust of policy.”

The Fed has said that it plans to hold short-term interest rates near zero at least as long as the unemployment rate remains above 6.5 percent. Mr. Bernanke echoed recent remarks by other Fed officials in suggesting that the Fed was likely to maintain its suppression of short-term interest rates for some time after unemployment dropped below that threshold, and that officials were considering lowering the threshold.

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