US warned about ailing banks

Federal Reserve chairman downplays strength of US economy despite booming stock market Ben Bernanke, the head of the Federal Reserve, is expected to emphasise the risks faced by the US economy from persistently weak house prices and an ailing banking sector when he gives his first press conference on Wednesday. In contrast to resurgent corporate profits and the booming stock market, which on Tuesday saw the Standard & Poor’s 500 hit a three-year high, he will downplay the strength of the economy. He is also expected to defy critics of his low interest rate policy, who have called for rate rises and an end to quantitative easing, which they blame for the collapse of the dollar and rising inflation. The twice yearly press conferences are a nod to the Bank of England and European Central Bank, which regularly address journalists on monetary policy trends. Bernanke is not expected to adopt the same football analogies beloved of Bank of England governor Mervyn King, but he is known to want to explain his policies to a wider audience. Until now he has only addressed Congress and made scripted speeches. He has submitted himself to an interview on 60 Minutes, though many Tea Party activists on the right wing of the Republican party criticised the show for giving him an easy time. The Tea Party is a regular critic of Bernanke, with many members calling for the abolition of the Federal Reserve and a return to the gold standard. Ben Bernanke US economy Economics Phillip Inman guardian.co.uk

Posted by on April 26, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.