March 2, 2013 / 4:09 AM / 4 years ago

Bernanke says low nominal rates don't mean policy is easy

Chairman of the U.S. Federal Reserve Ben Bernanke speaks before the House Committee on Financial Services on Capitol Hill in Washington, February 27, 2013.Larry Downing

SAN FRANCISCO (Reuters) - Federal Reserve Chairman Ben Bernanke on Friday said one key lesson from the Great Depression is that in times of economic distress, the numerical level of interest rates can be a misleading indicator of monetary stimulus levels.

"Monetary policy needs to be accommodative and not too tight, and you need to be careful about confusing low nominal interest rates with easy policy, which was a mistake that was made in the ‘30s," he told a conference at the San Francisco Fed. "Low nominal interest rates don't necessarily mean that policy is all that easy."

Reporting by Ann Saphir; Editing by Leslie Adler

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