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Bernanke: No Timeline for Ending the Fed's Accommodative Policies

Federal Reserve Chairman Ben Bernanke made clear on Wednesday there won't be any new moves to spur economic growth from the nation's central bank any time soon but he also indicated it will likely be several more months before the Fed begins to tighten monetary policy.

At his second news conference, Bernanke said the Fed will continue to “monitor the economy, revise our outlook … and make a judgment based on the incoming data.”

Earlier, the Federal Open Market Committee said it will keep its federal funds rate low for an extended period and will maintain its target federal funds rate range at zero to 0.25 percent.

“The reason we use terms like ‘extended period’ is not to be intentionally opaque," Bernanke insisted. "The reason is we don’t know exactly how long” they will be needed.

Asked if the FOMC has a statistical trigger that would begin the exit process, he said it would be impossible to create one given the independent views of the committee’s 17 members.

Bernanke did say the FOMC is at least two to three meetings away from taking further action—and he said it could be “significantly longer.” The first step in the exit process will be allowing the Fed’s portfolio to run off rather than reinvesting it, he added.

Last August, when the second round of quantitative easing was announced, he said, the situation was quite different from today. “We were essentially missing significantly on both sides of our mandate [to foster maximum employment and price stability].” Now, he said, we’re closer to the two objectives.

Bernanke also touched on the Greek debt crisis, maintaining the Fed has been “very assiduous” in assessing the risk of U.S. banks’ direct exposure to the crisis, which is “pretty small.” But he did not rule out the possibility of a European crisis roiling international markets and having a “significant” impact on the U.S. economy.

Desal opponents urge new citizen panel: Officials say public ...

SANTA CRUZ - A group opposed to building a desalination plant has asked the two water agencies developing the controversial project to appoint a citizen advisory panel designed to shake up a public information process critics see as one-sided and opaque.

Paul Gratz, a member of Santa Cruz Desal Alternatives, has urged a four-person task force made up of members of the Santa Cruz Water Department and Soquel Creek Water District to discuss at its July 20 meeting the establishment of a citizen-customer advisory committee that would closely monitor how information about the proposal is publicly disseminated.

"The request is to open up the process," Gratz said. "The public deserves to be engaged."

Gratz is not likely to get what he wants.

Officials with both agencies say the task force is doing its job of keeping the public abreast of the process involved in explaining why a plant is necessary, how it will be designed and operated, and at what cost. They say a separate citizen committee to evaluate different points of view about desal would muddy the process of informing the public about why the city and district are pursuing desalination.

Santa Cruz City Vice Mayor Don Lane, who chairs the task force, said he will not support the call for a citizen panel.

"It's coming from a frustration that the desal task force continues to do its job and develop a plan for a desal facility - that's its mission, that's its function," Lane said. "If people don't want it to do that, the desal task force isn't the place to make that argument. That's with the City Council and the (Soquel Creek Water) District."

The two agencies, who serve a combined 140,000 customers, already have voted to study desalination, though a final decision on whether to build the plant won't be made until studies on energy use, environmental impacts and initial design work are completed. The creation of a facility that could transform up to 2.5 million gallons of seawater each day for potable use also is likely to go before voters, and even if endorsed at the ballot box, must still win approval from the California Coastal Commission.

"We are carrying out what the council asked," said Santa Cruz Water Director Bill Kocher. "The truth needs to be out there, the scientific truth. That's what we're focusing on."

But opponents say fact-finding about the core reasons for desalination - to provide an additional, reliable water supply to combat drought and reduce surface water diversion to protect fish - has been heavily skewed. They have criticized the two agencies for budgeting $1.4 million during the past three years for a San Francisco contractor to conduct public outreach and other research - including time and materials for a host of meetings, advisories and a detailed website - they say promotes desalination rather than critically studying its pros and cons.

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