Bernanke's Next Challenge: Undoing His Own Work

(NEWSER) - Economists think the US unemployment rate will stay above 9% through 2010, the Wall Street Journal survey finds. Accordingly, those in the know believe the Federal Reserve will hold interest rates down at least through spring. “For real people, there is no recovery until the unemployment rate stabilizes,” one economist said. “If the Fed starts raising rates in the face of continued job losses, it could abort a recovery.” More»

Bigger deficits are worth the benefits, Fed chair tells Congress

(NEWSER) - Ben Bernanke supported the Obama administration’s economic policy before Congress today, the Wall Street Journal reports. The $787 billion stimulus bill should boost “demand and production” and soften job losses over the next 2 years, the Federal Reserve chief told the Senate Budget Committee. The expansion of government debt required by the stimulus is “unavoidable” Bernanke said, given the consequences of inaction. More»

They charged bigger interest rates on cheap money from Uncle Sam

(NEWSER) - Crisis-walloped banks aided with federal loans likely made a fortune by lending the same money back to the federal government at substantially higher interest rates, a new report indicates. The study by the Congressional Research Service supports complaints that the largest banks essentially engaged in taxpayer-financed arbitrage by cashing in on loans to Uncle Sam using money obtained almost for free from ... Uncle Sam. At the same time, American businesses were dying and homeowners were going under because bank loans or federal aid weren't available to them. More»

Fed chair leaves door open, but emphasizes reform

(AP) - Ben Bernanke today left the door open to higher interest rates, saying the increase might be needed to prevent new speculative investment bubbles from forming. But for critics who blame the Fed for feeding that speculative housing boom by holding interest rates too low for too long after the 2001 recession, Bernanke says that stronger regulation is the best way to prevent financial speculation from getting out of hand and throwing the economy into a new crisis. More»

Independent's move could force Dems to scrape up 60 votes

(NEWSER) - Saying that Ben Bernanke is too tied to the roots of the current financial crisis and too beholden the institutions that helped cause it, Sen. Bernie Sanders put a hold on the nomination process for a second term for the Federal Reserve chief. The Vermont independent’s move—not much of a surprise given his earlier opposition—could force Bernanke supporters to round up 60 votes to bring the nomination to the floor, rather than bring it to a vote via unanimous consent . More»