Bernanke Before Financial Services Committee Today

Federal Reserve Chairman Ben Bernanke will testify before the House Financial Services Committee on the economy and the Fed’s monetary policy activities today – a month after making comments that many say were misread, thus triggering an interest rate spike.

Wall Street will have an hour to study his remarks before he begins testifying – a break from the tradition of releasing the testimony when the hearing begins.

NAFCU Chief Economist David Carrier said, “I expect Chairman Bernanke to reiterate the FOMC’s view that ‘further improvement in the outlook for the labor market would be required before it would be appropriate to slow the pace of asset purchases.’ The unemployment rate has been averaging 7.6 percent for the past several months, and given the ongoing weakness in the economy, it is unlikely to show “substantial improvement” by the end of the year.

“I expect the Fed to stick with their stated objective to hold off on reducing asset purchases until the labor market improves substantially,” Carrier concluded.

The Economic Times reports that, after saying last month that the economy is recovering well enough for the Fed to pull back on bond purchases, Bernanke last week said “highly accommodative policy is needed for the foreseeable future.”

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