By TraderVox.com
Fed Chairman Ben Bernanke said on Thursday February 2nd that the economic recovery in the US remained “frustratingly slow” and the Europe’s debt crisis has complicated the recovery process even further. He lamented that there is risk that the developments in Europe may result to unfavorable outcome which could worsen the economic prospects in the US. He also made it clear to the house Budget Committee that Federal Reserve was committed to economic recovery and it is doing everything possible to avoid economic delay.
Bernanke insisted that the Fed was in close communication with the European authorities as part of its efforts to keep a close eye on the developments in Europe. He assured Americans that every measure is being taken to protect the Financial System in the Unite State. Bernanke was also categorical in insisting that while cutting the national debt is still a priority in the long term; the matter should be handled with a lot of caution to avoid impeding on the current economic recovery.
On questions about the Fed’s interest in the Housing market, Bernanke insisted that housing market was of interest to the Federal Reserve since it is an important aspect of the economy and may eventually determine the success of the recovery process. He also reiterated the importance of housing market to the monetary policy which is the core business of the Federal Reserve.
Bernanke defended the report released by the Fed during the month of January claiming that the report gave an analysis of the situation giving pros and cons of the measures taken in the housing sector. The hearing that came barely a week after the announcement that the Fed would extend the low interest rates periods up to 2014. This move has been interpreted by investor as showing the central bank’s lack of confidence in the current recovery measure and economic status. The report indicated that the intention of the Federal Reserve to keep inflation rate at around 2% and reduce the unemployment rate.
The Feds forecast indicates that the unemployment rate will remain high for 2012 at below 8.5% and the GDP is expected to increase to 2.7%.
Article provided by TraderVox.com
