Bernanke makes strong defense of Fed rate policies
WASHINGTON (AP) – Chairman Ben Bernanke is offering a sharp defense of the Federal Reserve’s bold policies to stimulate the weak economy, while cautioning Congress to respect its private discussions.
Bernanke says the Fed needs to drive down borrowing rates low because the economy isn’t growing fast enough to reduce high unemployment. The unemployment rate is 8.1 percent.
He says low rates could help lower the federal budget deficit by reducing the government’s borrowing costs and generating more tax revenue through stronger growth.
Bernanke is also using his speech to the Indiana Economic Club to caution Congress against changing the law so it could review the Fed’s interest-rate policy discussions. Such a step would improperly inject political pressure into those talks and make Fed policymakers less likely to act, Bernanke warns.