Bernanke Uses “FAQ” to Reassure

Fed Reserve Chair Ben Bernanke is just tired of being asked certain questions.

Speaking before the Economic Club of Washington, D.C., at mid-day, said he would use an “Internet frequently asked questions” (FAQ) style to address the major concerns about the economy, the four Q’s being:

Where is the economy headed?

What’s the Fed doing to support the economy and the financial system?

Will the Fed cause higher inflation?

How can we avoid a similar crisis in the future?

And the answers? 1) Credit remains tight, and household spending is unlikely to grow rapidly, and despite some rise in commodity prices, inflation will remain subdued; 2) The Fed’s doing a lot to restart the asset-backed securities market and other forms of credit, including auto loans, educational loans, and mortgages; 3) “The answer is no” and the Fed has “all the tools” needed to withdraw stimulus in a timely manner; 4) The Fed wants a “systemic oversight council” to exceed the authority of any one agency.

In conclusion, Bernanke noted, “At some point … we will need to unwind our accommodative policies in order to avoid higher inflation in the future. I am confident we have both the tools and the commitment to make that adjustment when it is needed.”