Federal Reserve Chairman Ben Bernanke signals continued support for lower rates
The Federal Reserve's low interest-rate policies are giving key support to an economy still burdened by high unemployment, Chairman Ben Bernanke told Congress on Tuesday.
Shortly before Bernanke spoke, several reports pointed to surprising economic strength: Americans' confidence in the economy rebounded this month, new-home sales jumped in January to the highest level since 2008, home prices rose at a healthy pace in December compared with a year ago and profits of U.S. banks jumped last quarter to the highest level in six years.
On the battle in Washington over how to restrain budget deficits, Bernanke said it's important not to cut the deficit too much while economic growth remains fragile. He noted the Congressional Budget Office estimates that the automatic spending cuts that take effect Friday would trim growth by 0.6 percentage point this year.
“Congress and the administration should consider replacing the sharp, front-loaded spending cuts required by the sequestration with policies that reduce the federal deficit more gradually in the near term but more substantially in the longer run,” Bernanke said.
News Photo Galleriesview all
- 101883Oklahoma tornadoes: The 'Big Dog,' the little boy and the hug that triumphs over tragedy
- 13737Bradley Cooper, Zach Galifianakis, Ed Helms drink in success of 'Hangover' series
- 10731Oklahoma tornadoes: ‘All I could do was sit there and hold her'
- 9553OKC Thunder: Kevin Durant tours Moore, meets with residents
- 8470Oklahoma tornadoes: Rams quarterback Sam Bradford leading aid effort
- 7788How to help tornado victims
- 7217Line of storms brings flash floods to Oklahoma City area