Rising consumer and business confidence coupled with the Federal Reserve's accommodative monetary policy and improving credit conditions point to a more rapid pace of economic recovery in 2011, the Fed Chairman Ben Bernanke told the Senate Banking Committee Tuesday.
The housing market remains exceptionally weak, though, Bernanke said, as the number of vacant and foreclosed homes continue to weight heavily on prices while sales and construction are still depressed.
In his biannual report to Congress, Bernanke said the Fed's policy of reinvesting proceeds of maturing securities into longer-term Treasurys "appears to have contributed to an improvement in financial conditions and a strengthening of the recovery."
He said the policy lowers term premiums and puts downward pressure directly on longer-term interest rates.
"By easing conditions in credit and financial markets, these actions encourage spending by households and businesses through essentially the same channels as conventional monetary policy," Bernanke told Congress.
For more information, please visit:
Bernanke backs QE2 policy as helping weak economic recovery
No comments:
Post a Comment