Ben Bernanke, fresh from his resounding triumph last week, when he was sworn in for a second term as Federal Reserve Board chairman, has been called up before the U.S. House of Representatives’s Financial Services Committee this Wednesday for a semiannual outlook testimony on the economy and monetary policy.
What’ll he say? Well, he won’t say what everyone wants to know, probably, which is the time frame for Fed tightening.
Jon Hilsenrath in today’s Wall Street Journal discusses the various tools at Bernanke’s disposal, such as the ability to raise the interest paid on “excess reserves” from 0.25% at the moment, when the Fed is “ready to tape the brakes.”
But another piece by Dow Jones Newswires’s Min Zeng today points out how conflicting are the signs from the various Fed members.
St. Louis Fed Reserve president James Bullard tells Reuters today that the Fed could begin to sell some assets in the second half of this year, Zeng notes.
But Zeng also notes New York Fed president William Dudley said last week that while it’s the right time to end the Fed’s involvement in the mortgage market (which is expected to wrap up next month), the Fed might need to extend the program.
So, in sum, lots of thoughts, lots of options, and no clear timeframe.
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