February 26th, 2013
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#1
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Senior Member
Join Date: May 2009
Posts: 8,105
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Ben Bernanke Urges Kwangress To Avoid Sharp Spending Cuts
Quote:
Federal Reserve Chairman Ben Bernanke warned Congress risks slowing the economy by allowing $85 billion in automatic spending cuts to be triggered on Friday, arguing they should be replaced with more deliberate, long-term cuts.
In prepared testimony for the Senate Banking Committee, Bernanke argued the sequester would pose a “significant headwind” to the economic recovery.
Instead of the indiscriminate cuts, Bernanke urged Congress to support tax and spending policies that incentivize employment and saving; help develop workplace skills; promote research and development; and fund “necessary and productive” infrastructure.
Bernanke offered a strong defense of the Fed's monetary policy and gave no indication it will slow its efforts, despite minutes of Fed meetings that show some officials are concerned the Fed should end its programs. Bernanke said the Fed's bottom-barrel interest rates and massive rounds of bond purchases are clearly supporting the recovery while keeping inflation in check.
The Fed is currently in the midst of its third round of “quantitative easing” and intends to buy $85 billion of bonds each month until it sees substantial improvement in the labor market. The central bank has also said it expects to keep interest rates near zero until the unemployment rate dips below 6.5 percent (it now stands at 7.8 percent) or inflation climbs above 2 percent.
The Fed's expansionary policy “helped spark recovery” in the housing market, has increased the sales and production of cars and other major goods, and boosted employment, Bernanke argued.
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http://thehill.com/blogs/on-the-mone...#ixzz2M2DiYe69
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