He's back

March 30, 2015 03:49 PM

Ben Bernanke launched a blog on Monday, giving the former Federal Reserve chairman a new pulpit from which to make an old argument: why interest rates need to be so low.

Bernanke, who handed the reins of the U.S. central bank to Janet Yellen last year, has been hitting the conference circuit more in recent months ahead of the planned publication of his book this autumn.

"Now that I'm a civilian again, I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers," he wrote, with perhaps a touch of hope, in his introductory blog post.

Bernanke's 2006-2014 stint atop the U.S. central bank was marked by the brutal financial crisis and a frustratingly slow recovery that prompted him to drive rates to near zero and launch three rounds of bond purchases, to stimulate the economy.

The Fed is expected to begin tightening policy later this year. But in the past, both Bernanke and Yellen have been criticized for keeping rates artificially and dangerously low and, as Bernanke noted in his blog, hurting seniors' savings.

"The bottom line is that the state of the economy, not the Fed, ultimately determines the real rate of return attainable by savers and investors," he wrote on the blog hosted by Brookings Institution, where he is a distinguished fellow in residence.

"The best strategy for the Fed I can think of is to set rates at a level consistent with the healthy operation of the economy over the medium term, that is, at the (today, low) equilibrium rate," Bernanke added.

"There is absolutely nothing artificial about that!"

The blog, which Brookings said may also occasionally touch on baseball, a passion of Bernanke's, can be found here.


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Jonathan Spicer, Reuters