With inflation creeping up, Fed chairman Ben Bernanke will keep interest rates steady—at least for now, reports the Wall Street Journal. Soft business investment and weakening housing are becoming serious risks, but the long-term outlook is good, Bernanke told Congress yesterday. "The current stance of monetary policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation."
He said he would review the Fed's powers to tighten the rules on subprime mortgages, though he warned that doing so could backfire, reducing the credit supply. He challenged recent comments by Alan Greenspan that put the odds of recession at one in three: "There seems to be a sense that expansions die of old age. I don't think the evidence really supports that."