NYT: Bernanke says recovery still too halting - Spear's Magazine

NYT: Bernanke says recovery still too halting

WASHINGTON Ben S. Bernanke, the Federal Reserve chairman, signaled on Wednesday that he did not plan to begin raising interest rates anytime soon, saying the economic recovery would remain halting for months to come.

WASHINGTON — Ben S. Bernanke, the Federal Reserve chairman, signaled on Wednesday that he did not plan to begin raising interest rates anytime soon, saying the economic recovery would remain halting for months to come.

In presenting the Fed’s semiannual monetary report to Congress, Mr. Bernanke did not waver from the Jan. 27 statement of the central bank’s key policy making board, or from a Feb. 10 statement in which he explained to Congress the strategies for gradually reducing the vast sums that banks hold in reserves at the Fed.

“Although the federal funds rate is likely to remain exceptionally low for an extended period, as the expansion matures, the Federal Reserve will at some point need to begin to tighten monetary conditions to prevent the development of inflationary pressures,” Mr. Bernanke said in a prepared statement.

While Mr. Bernanke did not change his outlook on interest rates or the economy, he did announce two significant steps to improve transparency and accountability of the Fed, after a period in which the central bank has faced considerable criticism.

Significantly, Mr. Bernanke said that the Fed would “support legislation that would require the release” of the names of borrowers that used the extraordinary lending programs the Fed created in 2008 to prop up the markets for commercial paper, money market funds and even consumer loans. The Fed lent to investment banks for the first time and helped arrange the sale of the investment bank Bear Stearns and the rescues of the American International Group and Citigroup.

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