Banking, finance, and taxes
Ben Bernanke Says Federal Reserve Is Not Monetizing The Debt
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FOMC Chairman Ben Bernanke is speaking Monday to the Economic Club of Indiana in Indianapolis with his speech titled “Five Questions about the Federal Reserve and Monetary Policy.” As far as a brief summary, here are some comments before the full question and answer format presented.
Bernanke sees the economy continuing to expand and he expects that inflation will remain low for the foreseeable future. The growth has not been enough to help the jobs picture very much, but tax reform and fiscal changes would help the economy also as monetary policy cannot fix everything. Bernanke reiterated that the Fed will keep rates low even after the real recovery begins. The part that we are keen to see is that Bernanke claims that the Fed is not monetizing the debt. We will leave that interpretation up to you without any sarcastic comments.
His 5 questions addressed were as follows:
1. What are the Fed’s objectives, and how is it trying to meet them?
2. What’s the relationship between the Fed’s monetary policy and the fiscal decisions of the Administration and the Congress?
3. What is the risk that the Fed’s accommodative monetary policy will lead to inflation?
4. How does the Fed’s monetary policy affect savers and investors?
5. How is the Federal Reserve held accountable in our democratic society?
JON C. OGG
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