Home > Associated Press, Congress, Economic News, Economy, Federal Reserve > Members of Congress sharply questioned Federal Reserve Chairman Ben Bernank Over Inflation Threat

Members of Congress sharply questioned Federal Reserve Chairman Ben Bernank Over Inflation Threat


Republicans grill Bernanke over inflation threat

Feb. 9, 2011, 6 p.m. EST
Article Published Associated Press
Writesr 

Article Posted by Public Blog News Posting Servive Group

WASHINGTON (AP) — Members of Congress sharply questioned
Federal Reserve Chairman Ben Bernanke Wednesday over whether the Fed’s
policies are raising the risk of higher inflation in the months ahead.

House Budget Committee Chairman Paul Ryan, R-Wis., said he is
concerned that the Fed won’t be able to detect inflation until “the cow
is out of the barn” and inflation is already spreading dangerously
through the economy.

Bernanke acknowledged that inflation is surging in emerging
economies. But he downplayed the risks to the U.S. economy, even as
lawmakers expressed concerns about rising gasoline and food prices.

Inflation in the United States remains “quite low,” Bernanke
said. He blamed higher prices on strong demand from fast-growing
countries such as China— not the Fed’s policies to stimulate the
economy, including buying $600 billion worth of Treasury debt.

Bernanke’s remarks suggest the Fed will stick with the
bond-buying plan through June, as scheduled. The program is aimed at
invigorating the economy by lowering rates on loans and boosting prices
on stocks.

It was Bernanke’s first appearance before the House since
Republicans took control last month. He faced tough questions from
them, despite being a member of the party.

Ryan worries that the Fed’s stimulus policies, including the
debt purchases, could trigger inflation or fuel speculative buying of
stocks or other assets.

“Many of us fear monetary policy is on a difficult track,”
Ryan said.

Rep. Todd Rokita, R-Ind., seemed skeptical of the Fed’s
ability to fend off inflation before it gets out of hand. In the Fed’s
history, when did the Fed “get it right?” Rokita asked.

Bernanke said former Fed Chairman Paul Volcker brought down
double-digit inflation during the 1980s by pushing up interest rates to
levels not seen since the Civil War.

The Fed chief said he was confident the Fed has the political
will to boost interest rates and snuff out inflationary forces before
they take hold.

Bernanke did acknowledge that rising gas prices are a threat
to the economy. Prices have been around $3 a gallon nationally. If they
were to go above $4 a gallon, that would “take a significant amount of
disposable income away from people,” he said.

Still, Bernanke defended the bond-purchase program. He said it
is needed to ease high unemployment and credited all the Fed’s stimulus
policies with creating or saving 3 million jobs over the past several
years.

The unemployment rate was 9 percent in January after the
fastest two-month decline in 53 years. Bernanke said the drop is
encouraging but cautioned that it will take four or five years for
hiring to return to normal — around 5 percent or 6 percent. He said the
economic recovery won’t be assured until companies step up hiring on a
consistent basis.

Ryan and Bernanke agreed that Congress and the White House
must have a plan to reduce the government’s $1 trillion-plus deficits.

Ryan favors budget cuts to get the deficits under control.

Bernanke didn’t endorse any specific policies on
deficit-cutting. He said lawmakers should hold off on spending cuts or
tax increases until the economy is in better shape.

Bernanke again warned Republicans that they shouldn’t play
political games with the Treasury Department’s request to raise the
government borrowing authority.

Treasury has asked to raise the $14.3 trillion debt ceiling.
House Republicans have vowed to make deep spending cuts a precondition.

“We do not want to default on our debts. It would be very
destructive,” Bernanke said.

At the same time Bernanke was testifying, Rep. Ron Paul,
R-Texas, held a hearing on whether the Fed’s bond-buying program and
record-low interest rates can really help create jobs. Paul, an
outspoken critic of the central bank, favors abolishing the Fed.

Lawmakers at that hearing also expressed concerns that the
Fed’s policies will spur inflation.

“If the Fed didn’t see this mess coming, will they see the
recovery starting in time to turn off the printing presses to stop
inflation,” asked Rep. Frank Lucas, R-Okla. “I am not sure their vision
in the future will be any better than in the past.”

___

AP Economics Writer Martin Crutsinger contributed to this
report.

______________________________________

Video Section:

Warmest regards,
Calvin L. Ledsome Sr.,
Owner of Public Blog News Posting Service Group

Join Our Making Money Easy Tips Plus Community
  • Enter Your Email Address and First Name Only, Right Now Below, And Be Forwarded To Our Revolutionary Automated Lead Generation Money Machine Setup e-Course’

ONCE YOU JOIN:

  • Expect a powerful make money tool bonus in your email tomorrow...
  • Expect to be forward from here to a powerful make money bonus tool necessary for earning on or off the internet, I promise you need this make money system.
  • Expect Each Day: One Daily Make Money Easy Tip, National and Global Economic News Blog Post, Advanced Make Money Easy Product Opportunity to review… 0 – 4 emails that can enhance your business life daily.
* Enter Email
* Enter First Name
* = Required Field

The Making Money Easy e-Course You Can Trust

Thank you for visiting and using our services
Calvin L. Ledsome Sr.,
______________________________________________________
For the record, MMeTips, will never intent to SPAM your account, as this defeats our purpose of bring quality products, tips, ecources, services etc., to help with our membership financial growth for years to come. As we learn of new Make Money Easy Tips, products and services, etc., we will post them to your email. Remember you can always cancel our services at your will. We happy you are with us, and our goal is to bring you researched Make Money Easy Tips, eCourses, Products, Services, etc., that are real, and that work. Thank you for joining us.
MMteTips Community Membership Host
Calvin Lee Ledsome Sr.,
1410 Belmont Place, Boynton Beach, FL, 33436
Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: