Posted on 03/02/2013 10:19:39 AM PST by haffast
Ben Bernanke, the chairman of the Federal Reserve, said on Friday that pulling back on aggressive policy measures too soon would pose a real risk of damaging a still-fragile recovery.
There has been some disagreement within the Fed of whether the central bank's bond-buying program, which is designed to push down long-term interest rates, should be phased out.
Fed Board Governor Jeremy Stein argued recently there were signs of overheating in certain financial markets and that the central bank should consider using monetary policy to address such risks if they persist.
The Fed chief was not convinced, saying that, even for the purposes of financial stability, a continuation of the central bank's aggressive stimulus, conducted through purchases of Treasury and mortgage securities, remains the optimal approach.
"Premature rate increases would carry a high risk of short-circuiting the recovery, possibly leading - ironically enough - to an even longer period of low long-term rates," Bernanke said.
snip
In response to the financial crisis and deep recession of 2007-2009, the Fed not only chopped official rates to effectively zero, but also bought more than $2.5 trillion in assets in an effort to keep long-term rates low.
snip
"We pay special attention to developments at the largest, most complex financial firms," Bernanke said.
He argued banks had gone some way toward repairing their balance sheets since the financial crisis. The Federal Deposit Insurance Corp. reported this week that bank profits rose in 2012 to their highest levels since 2006, the year before the subprime mortgage meltdown gained momentum.
(Excerpt) Read more at news.yahoo.com ...
Point of order, doesn't something have to first exist in order for it to be "short-circuited"?
just sayin...
I’ve got news for Ben the Money Mimeographer: there isn’t any recovery. None.
Bernanke: There’s No Housing Bubble to Go Bust
Nell Henderson-Washington Post Staff Writer
Thursday, October 27, 2005
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html
what? me worry?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.