Skip to comments.Bernanke says rates to stay low for "extended period"
Posted on 04/14/2010 12:14:59 PM PDT by mlocher
WASHINGTON (Reuters) - A moderate U.S. economic recovery is likely to warrant very low interest rates for a long time, Federal Reserve Chairman Ben Bernanke testified on Wednesday.
Refusing to rule out the risk of a "double-dip" recession, Bernanke told lawmakers inflation is not an immediate concern, giving the Fed room to maintain its highly stimulative policies.
"The Federal Open Market Committee has stated clearly that they currently anticipate that very low, extremely low rates will be needed for an extended period," Bernanke said in response to questions from lawmakers of the Joint Economic Committee.
However, he stressed that this commitment was based upon certain conditions in the economy, including underused productive capacity, high unemployment and anchored inflation expectations.
"If those conditions cease to hold and we anticipate changes in the outlook then of course we will respond to that," Bernanke added.
He said inflation figures remain subdued, and long-term inflation expectations remain contained. A government report on Wednesday showed U.S. consumer prices climbed 2.3 percent in March compared with a year ago. They rose just 1.1 percent when food and energy were excluded, the smallest increase in more than six years.
Bernanke said the risk of a renewed contraction was "not negligible" but the threat had receded in recent months. He said growth was still weighed down by weakness in the construction sector and battered state and city budgets.
(Excerpt) Read more at news.fidelity.com ...
Naturally, Reuters missed the key part of Bernanke's remarks.
Good, let go sue the credit card companies for usury.
Yep, till after this year’s election.
That is the payoff for Bernake’s reconfirmation AND for a banking bill that gives the Federal Reserve power to bailout and takeover banks without prior congressional authority.
After that taxes and interest rates go up and Obama blames the Republicans after their big win for screwing up his economy.
The Fed can influence interest rates but they are ultimately set by the open market!
I guess Ben can slip it into autopilot then, since the s_ck economy appears to stretch to the horizon. Good news for the traders. Maybe we should all become traders. Might be the only jobs left besides prezeedent that is.
You mean Obama's credit card legislation last year still means we have to actually pay our credit cards?
Yes, the open market sets them. Rates have started to creep up just a little already. With the way things are economically right now and the way BHO and company are spending like there is no tomorrow I don’t think they are going to be able to artificially suppress the interest rates for very long.
What are underwear gnomes? I have never heard of them before. It must be a special breed of gnomes specializing in politics, right?
“Its not spending, its an investment!”
Exactly. We will “grow out of the deficit”.
Remember that one?
Drats. I thought that chug-chug-chug noise was the sound of oil drilling that followed Obama's announcement. I guess I was wrong.
Yea. No one eats or puts gas in their car or heats their house.
I am not surprised rates are low at present because consumer and corporate borrowing is nil. Same can't be said for the government.
What's got me stumped is the equities rally. The fundamentals don't support it and the future looks bleak (unless you're in India or China).
There was a time shortly ago that I thought the equities markets were looking beyond Obama and discounting that surge back to the present. But with all Obama has done in the last few weeks (his nuke pact with Russia, his treatment of Israel, the HCB, etc., etc.), I don't think he is going to let go of the reins of office willingly.
He's a full-blown tyrant!
Bring back 20% rates!!!!
If banks can borrow money from the Fed for nothing and then turn around and computer whiz up some money trades overnight why the hell should they bother with actually going through the trouble of filling out all the papers etc. for a frickin home loan and then lose sleep over the potential that the deadbeats the government made them loan it to, don’t pay and squat for a coupla years? What incentive?
Look at the JPM earnings report. Most of it came from trading and securities revenue. When you look at the traditional boring banking stuff like making and servicing loans, it was something a lot less spectacular.
Like I said, pretty much cleaner (less work) in making profits and lots less headache isn’t it?
They are famous for their business model on how to get rich stealing underpants: Phase 1: Collect Underpants
Phase 2: ?
Phase 3: Profit
The joke obviously being that the key phase is missing. Much like our “dear” leaders plans to remake America in his image.
I honestly think the equities rally is based more on the Balance Sheets of these companies hoarding so much cash. The cash assets are weighting the models toward buy.