Wednesday, July 22, 2009
Federal Reserve Chairman Ben Bernanke faced a grilling in Congress on Tuesday about the role of the Fed, and spoke out strongly against a legislative proposal to audit the central bank.
Speaking to the House Financial Services Committee, Bernanke tempered optimism that the economy is improving, noting that, “despite these positive signs, the rate of job loss remains high and the unemployment rate has continued its steep rise.” He added the Fed expects inflation to remain subdued over the next two years.
He discussed the Federal Reserve’s strategy to extricate itself from the outsized role it’s taken in the economy to avert financial disaster. He reminded Congress about the need to get the budget deficit fixed: If not, “we risk having neither financial stability nor durable economic growth,” he said.
Bernanke also came out in strong opposition to legislation proposed by Rep. Ron Paul, R-Texas, to audit the Federal Reserve.