Among the comments, he made were the following:
The U.S. economy is continuing to slowly recover from the after-effects of the housing boom and bust and the financial crisis. But the recovery has been disappointing...Given the erratic economic data and the poor stock market performance in recent weeks, will Dudley and the rest of the Fed deem it appropriate to accelerate money printing?
Given our forecast of stable prices and a still slow path back to full employment, there is an argument for easing further. But, unfortunately, our tools have costs associated with them as well as benefits. Thus, we must weigh these costs against the benefits of further action...
As long as the U.S. economy continues to grow sufficiently fast to cut into the nation’s unused economic resources at a meaningful pace, I think the benefits from further action are unlikely to exceed the costs. But if the economy were to slow so that we were no longer making material progress toward full employment, the downside risks to growth were to increase sharply, or if deflation risks were to climb materially, then the benefits of further accommodation would increase in my estimation and this could tilt the balance toward additional easing...
Under such circumstances, further balance sheet action might be called for. We could choose between further extension of the duration of the Federal Reserve’s existing Treasury portfolio and another large-scale asset purchase program of Treasuries or agency mortgage-backed securities.
In recent weeks, Bronco Ben has slowed money growth in dramatic fashion. Back in October 2011, Bernanke was pumping money out in huge quantities. The three month annualized money growth rate was 13.3%, at that time, the six month annualized rate was 14.5%. This is what caused the manipulated boomlet we had.
Over recent weeks, Bronco Ben has fallen off his bronco and we are far, far from those October growth rates. As of March 2012 three month annualized growth has declined to 7.6% and, most dramatically, April 2012 three month annualized growth came in at 4.0%. This is what is behind the earlier mini-boom in the economy and the sudden weakness. Bernanke has pulled the plug on money pumping (Most likely because of targeting of the Fed funds rate. at relatively high levels of money inflows into the U.S. ) Will he reverse again? He will at some point that's what central bankers do, but he is the roughest most stop and go, Fed chairman in history. It makes it exceedingly difficult for investors, and very difficult for businessmen to plan.