Skip to comments.Bernanke says Fed stimulus benefits clear, downplays risks
Posted on 02/26/2013 1:37:38 PM PST by ExxonPatrolUs
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke strongly defended the U.S. central bank's monetary stimulus before Congress on Tuesday, easing financial market worries over a possible early retreat from bond buys.
The Fed chairman also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a "significant headwind" for the modest economic recovery.
Bernanke said Fed policymakers are cognizant of potential risks from their extraordinary support for the economy, including the possibility that it might fuel unwanted inflation or stoke asset bubbles.
But, in testimony on the central bank's semi-annual report on monetary policy, he said the risks did not seem material at the moment, adding the central bank has all the tools it needs to retreat from its monetary support in a timely fashion.
"To this point, we do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more rapid job creation," Bernanke told the Senate Banking Committee.
In response to the financial crisis and deep recession of 2007-2009, the Fed not only slashed official interest rates to effectively zero but also bought more than $2.5 trillion in mortgage and Treasury debt in an effort to push down long-term interest rates and spur hiring.
The Fed is currently buying $85 billion in bonds each month and has said it plans to keep purchasing assets until it sees a substantial improvement in the outlook for the labor market.
(Excerpt) Read more at mobile.reuters.com ...
OPINIONApril 2, 2012, 7:20 p.m. ET.
The Worst Economic Recovery in History
“Since the second half of 2009, the U.S. economy has grown at a rate of 2.4%, a full percentage point below average long-term growth.”
“...our current recovery pales in comparison with most other recoveries, including the one following the Great Depression.”
Yes his recovery is moving along like a bat outta heck.
You should be proud! Think of all those people on the red line and how you've helped them......
Keynes, John Maynard - By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
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