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Bernanke May Explain Fed Exit Strategy in Testimony Next Week
Posted By admin On July 13, 2009 @ 4:15 am In Money Watch | Comments Disabled
Craig Torres and Scott Lanman
Monday, July 13, 2009
July 13 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke probably will show how the central bank will exit the biggest monetary expansion in history when he reports to Congress next week, economists said.
The Fed pumped $1 trillion into the banking system over the past year through bond purchases and emergency loans, doubling assets on its balance sheet. Reassuring investors that inflation won’t exceed forecasts once the recession ends will give the Fed more credibility, said Dean Maki, chief U.S. economist at Barclays Capital Inc. While policy makers have spoken about specific tools they may use, they haven’t laid out a strategy.
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“Now is the time to articulate the exit strategy,” said Vincent Reinhart, former monetary-affairs director at the Fed and now resident scholar at the American Enterprise Institute in Washington. “The Federal Reserve doesn’t speak with one voice and the testimony is an opportunity to present the consensus view.”
The Federal Open Market Committee will release updated economic forecasts on July 15. At their April meeting, officials anticipated inflation of between 1 percent and 1.6 percent in 2010, up from 0.6 percent to 0.9 percent this year. Their long- run forecast is for price increases of 1.7 percent to 2 percent.
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URLs in this post:
 Bloomberg: http://www.bloomberg.com/apps/news?pid=20601087&sid=aNU.UkT9EB68
 Image: http://prisonplanet.tv/signup.html
 Euro Global Poll Shows More Than 50% Predicting an Exit: http://www.prisonplanet.com/euro-global-poll-shows-more-than-50-predicting-an-exit.html
 The FED: No Exit: http://www.prisonplanet.com/the-fed-no-exit.html
 No Exit for Ben: http://www.prisonplanet.com/no-exit-for-ben.html
 Bernanke Battles `Big-Time’ Economic Erosion With New Rate Cuts: http://www.prisonplanet.com/bernanke-battles-big-time-economic-erosion-with-new-rate-cuts.html
 No Exit – Stage Left or Right: http://www.prisonplanet.com/no-exit-stage-left-or-right.html
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