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World Markets Advance on Bernanke Easy-Money Remark

  • VOA News

FILE - Federal Reserve Chairman Ben Bernanke, June 19, 2013.

FILE - Federal Reserve Chairman Ben Bernanke, June 19, 2013.

World stock markets advanced Thursday after the chief of the U.S. central bank said a continuation of easy money policies is needed to keep fueling the U.S. economic recovery.

Both the bellwether Dow Jones Industrial Average of 30 key stocks and the broader Standard & Poor's index of 500 companies soared past record highs they set last May.

Earlier, Hong Kong's Hang Seng index closed up 2.5 percent, while markets in London, Frankfurt and Paris all ended higher.

In mid-June, U.S. Federal Reserve chairman Ben Bernanke said policy makers had concluded that if the American economy continues its steady advance, the central bank could later this year ease off its $85 billion-a-month purchase of securities to pump money into the U.S. economy and end them in 2014. Minutes of the Fed's meeting three weeks ago show that some officials wanted to end the asset purchases even sooner, by the end of this year.

The prospect of the end of stimulative measures to spur the U.S. economy, the world's largest, sent world financial markets into a quick, but short-lived tailspin. Some investors said they feared the central bank also could start to increase its benchmark interest rate, now near zero.

With investors seemingly confused about the Fed's intent, Bernanke, in answer to a question after a speech late Wednesday, said the U.S. economy still needs an easy money approach in the coming months.

"Highly accommodative monetary policy for the foreseeable future is what's needed in the U.S. economy," he said.

Hearing that, major investors throughout the world bought stocks on Thursday.