Bernanke makes strong defense of Fed rate policies Associated Press Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Updated 4:26 p.m., Monday, October 1, 2012 WASHINGTON (AP) — Chairman Ben Bernanke offered a wide-ranging defense Monday of the Federal Reserve's aggressive policies to stimulate the still-weak economy. The Fed needs to drive down long-term borrowing rates because the economy isn't growing fast enough to reduce high unemployment, Bernanke said in a speech to the Economic Club of Indiana. Low rates could also help shrink the federal budget deficit by easing the government's borrowing costs and generating tax revenue from stronger growth, Bernanke argued. Bernanke spoke two days before President Barack Obama and GOP challenger Mitt Romney will hold a debate in which the economy is the central theme. The Fed's latest round of bond buying and its plan to keep rates super-low into 2015 will likely provide only modest help, said David Jones, chief economist at DMJ Advisors. "Many other steps could be taken to strengthen our economy over time, such as putting the federal budget on a sustainable path, reforming the tax code, improving our educational system, supporting technological innovation and expanding international trade," he said. [...] the Fed chairman reiterated his argument that lower rates boost growth by helping increase prices of stocks, homes and other assets. Bernanke noted that when the Fed launched its first round of bond buying in late 2008, the average rate on a 30-year fixed-rate mortgage was a little above 6 percent.
Bernanke Makes Strong Defense Of Fed Rate Policies
Business Heds Index, Seattle Post-Intelligencer: Business
Mon, 10/01/2012 - 7:28pm
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