Heartland Institute Experts React to Fed Chairman Bernanke Testimony
Chicago, IL (PRWEB) July 17, 2013 -- Federal Reserve Chairman Ben Bernanke testified on Capitol Hill today that the Fed’s short-term interest rate is likely to stay near zero “for the foreseeable future.”
The following statements from finance policy experts at The Heartland Institute– a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Director of Communications Jim Lakely at jlakely(at)heartland(dot)org and 312/377-4000 or (cell) 312/731-9364.
“Fed Chairman Ben Bernanke essentially said he doesn’t know where the economy is headed or when it will get there. He’s guessing. It’s astonishing that one man presumes to try to exercise such control over the lives of more than 300 million Americans and tries to influence economies around the world. It’s even more astonishing that we are forced to let him.”
Steve Stanek
Research Fellow, Budget and Tax Policy
The Heartland Institute
Managing Editor, Budget & Tax News
sstanek(at)heartland(dot)org
815/385-5602
“The testimony today by Federal Reserve Chairman Ben Bernanke made it fairly clear that for the foreseeable future, the Fed will continue to follow its highly ‘easy money’ policy."
“This means that the latest round of ‘quantitative easing’ will result in the money supply being increased by over an additional $1 trillion during the 2013 calender year (based on monthly Fed purchases of U.S. government securities and U.S. agency mortgages of $85 billion per month). Unless the Federal Reserve devises an effective and stable ‘exit strategy’ for reining in the over $3 trillion of new money it will have created in the banking system between 2008 and the end of 2013, the economy will be threatened with significant price inflation in the years ahead."
“Chairman Bernanke also insisted that regardless of the outlook for unemployment or price inflation in the months ahead, Federal Reserve monetary policy will maintain a near zero rate of interest on federal funds in the banking system and short-term U.S. Treasury securities for an unspecified period of time."
“As a consequence, the U.S. financial markets will continue to operate without any market-based rates of interest to inform lenders or borrowers about the real (opportunity) costs of saving or investing. This runs the high risk of generating a wide range of unsustainable and misdirected investment decisions that may set the stage for another financial crisis at some point in the future."
“All-in-all, the current Federal Reserve monetary and interest rate policies are running the risk of producing the very financial and market volatility that Chairman Bernanke says the Fed is trying to prevent.”
Dr. Richard Ebeling
Professor of Economics
Northwood University
ebelingr(at)northwood(dot)edu
914/ 564-7030
The Heartland Institute is a 29-year-old national nonprofit organization headquartered in Chicago, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.
Jim Lakely, Heartland Institute, (312) 377-4000, [email protected]
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