Fed is looking for a credible plan going forward as Bernanke expects unemployment to remain elevated for the next 4-5 years

Bernanke is expecting a stronger recovery, but not too good.  For Bernanke, the employment situation is unacceptable and he says that they need a "credible plan" going forward.  Of course he only says that because his current plan of printing more money is not working.

Unfortunately, the Federal Reserve cannot put together a credible plan because creating a dollar out of thin air does not put more people back to work.  That is another reason why we should at a minimum take the Federal Reserve out of the job creation business.  The employment mandate was always a bit bipolar.

He also expects high unemployment for the next 4-5 years.  Via Forbes:
In referring to the continued level of unemployment that dropped four tenths of a percentage point to 9.4% in December (see "U.S. Adds Jobs, Unemployment Falls to 9.4%"), Bernanke said a stable job market is the first priority for the central bank. "Stabilizing is a very important first step," Bernanke said to committee chairman Kent Conrad (D-ND). "It is not enough to say we're not doing anything right now because of the recession, we'll do something later. We need a credible plan going forward." 

Bernanke expects the unemployment rate to be close to 8% two years from now, and said it could take four or five more years for the job market to normalize. "Persistently high unemployment, by dampening household income and confidence, could threaten the strength and sustainability of the recovery," he continued.

Inflation is another concern that Bernanke projects to be at historically low levels for "some time." Consumer price inflation is declining from year to year since before the recession began, while wage growth has also slowed.
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The Fed's Bipolar Mandate

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