The reduction in unemployment over the past two months is an encouraging signal, said today the President of the U.S. Federal Reserve Chairman Ben Bernanke. But he warned that it would take several years to recover normal levels of employment. In a speech to the Budget Committee to the House of Representatives Bernanke told The Associated Press, also warned that failure to develop a plan to reduce the budget deficit of 1 trillion. dollars in the long run could harm the economy. In January, unemployment in the U.S. marked level of 9 percent after the most rapid decline of its two 53. This fall “gives some grounds for optimism about jobs,” said Bernanke. The Fed chairman noted that unemployment remains too high. In his labor market is improving, but slowly. The central banker said that the economy has recovered just over 1 million lost by more than 8 million jobs during the worst recession in generations. According to Bernanke unemployment is likely to remain high for some time. The central banker urged Congress to act now to reduce the budget deficit to not have at a later stage to take “painful” measures under pressure from the markets. Ben Bernanke has denied any inflationary pressures in the U.S. economy and protect liberal monetary policy the central bank.
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The unemployment rate in the U.S. is expected to remain well above 7 percent by the end of 2012 and throughout the term of the current U.S. president Barack Obama. It said Federal Reserve Chairman Ben Bernanke before Congress, said New York Times. He will need time to recover all the 8.5 million jobs, removed during the recession in the U.S. in 2008 and 2009. Ben Bernanke is concerned that the economic outlook and financial conditions in the country remain unusually uncertain, and warns that the fiscal crisis in Europe has become an obstacle to economic growth in recent months. Speaking on the occasion of his presentation was a semi-annual monetary policy report to the Federal Reserve to Congress. Analysts say his tone is become much more cautious than the presentation of the last report in February. Bernanke confirmed in his speech that the economic expansion that began in mid 2009, continues but with lower rates. That contributes significant support from governments and central banks with their common fiscal and monetary policy. He expects that the growing demand of households and businesses will help sustain growth, despite incentives from the government will have less effect.
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The leaders of the U.S. Federal Reserve Ben Bernanke and European Central Bank (ECB) Jean-Claude Trichet stressed in separate statements that developing economies are a key factor for global financial stability. According to Bernanke the global economy increasingly dependent on emerging markets to maintain strong domestic demand and economic and financial stability. The improvement of policies and regulatory frameworks in emerging markets has an effect beyond those economies themselves, he said. In a separate statement prepared for a press conference during a meeting of finance ministers and heads of central banks of the G-20 in South Korea at the end of this week, Trichet stated that developing economies have been a source of strength in the world financial crisis. Characteristic aspect of this crisis was that going from industrialized economies. Developing countries were also severely affected, but as a group remained the lifeblood of the global economy, Trichet said in a pre-prepared statement for the press conference. Speaking of Bernanke is also pre-recorded for the event. Bernanke gives an example South Korea, saying the government and the central bank of the country, launched after the Asian financial crisis of the late 90’s of last century, helped South Korea to resist the current crisis.
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The U.S. Federal Reserve will probably raise its main interest within six months, with between a quarter and half percentage points, according to a survey of the National Association of Business Economics (NABE), said. According to the survey, conducted every six months, most of NABE economists find this almost zero interest rate the Fed is appropriate. More and more of them, however, feel that it is too stimulating. “The majority believes that the increase in interest rates over the next six months is as likely and appropriate,” said NABE president Lynn Riyzar. According to the Fed’s high unemployment and low inflation to justify keeping interest rates extremely low for an extended period. The data indicate that the economy has gradually recovered and by some leaders of the Fed Reserve needs to start preparing the markets for the tightening of financial conditions. Economists interviewed by NABE, believe that the suspension of purchases of mortgage securities by the Fed will increase interest rates on mortgage loans with an average of 42 basis points. The program, worth 1.25 trillion. dollars, will be discontinued at the end of the month. 44% of the respondents believe that inadequate regulatory oversight was the main reason for the deep financial crisis, which led the country to a painful recession.
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The three main stock indexes in the U.S. I found myself in negative territory at the beginning of the last session of the week for Wall Street, after Federal Reserve unexpectedly raised interest rates on loans which commercial banks in the country. Investors took that as a sign of recent increases in base rate in the U.S. and opted to take a cautious stance. The index of the 30 largest and most traded stock companies, Dow Jones Industrial Average falling by 0.1% to 10 383.68 points and a half hours after the beginning of the session. Broader index S & P 500 gave up 0.1 percent to 1 105 points, mainly because of reductions in financial, energy and extractive companies. On the Nasdaq Stock Exchange main index Nasdaq Composite lost 0.2% to 2 236 points. Previous three sessions brought to the state index increases because of the good data on housing and factory sector. The encouraging financial results of the largest PC maker in the world also Hewlett-Packard stock increased optimism. The surprise Fed decision, announced after the end of the session on Wall Street on Thursday, dipped indexes in Asia and Europe today.
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Future of Ben Bernanke, who on 31 January to appear in the U.S. Senate to be reelected for a second term in office of President of the U.S. Federal Reserve (Fed), is less certain, says the online edition of the WallStreet Journal. At the end of last week the number of senators who will vote against the increase, incl. and members of the Democratic Party. Fed is subjected to very severe criticism over its policy during the passing decade of this century. According to the Financial Times the charges were for common monetary policy for financial market deregulation, weak control over the banks, which has indeed led to the emergence of the financial crisis. However, many legislators are unhappy with the actions of the U.S. central bank and specifically by Bernanke and himself during the crisis, incl. and rescue of the banking system and specifically the insurance giant AIG, to whom was committed and guaranteed $ 180 billion public money. On Friday, the Democratic Party Senators Barbara Boxer and Ras Feynhold, who are partial elections for their eventual re-election, said they would vote against a second term of Bernanke. “The next chairman must not be associated with a failed financial policies of the recent past,” said Boxer to WallStreet Journal. According to the newspaper, referring to Dow Jones Newswires, for 15 senators have announced that Bernanke will not support (4 Democrats, 10 Republicans and one non-party), 26 senators, however, have announced that they will support it, while 59 does not have publicly announced comment. Bernanke needs 60 votes to get a second term.
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The Federal Reserve Chairman Ben Bernanke defended his post and taken steps under his leadership from the central bank in the U.S. to fight economic and financial crisis. Bernanke made the statement before the Senate, which must consider his candidacy for a second four-year term until the end of December. Under his leadership, the Federal Reserve cut the key rate in the United States to levels close to zero and set aside 3 trillion. dollars to strengthen the financial system. Bernanke warned that lower interest rates can not be changed prior to the careful analysis and assessment of the economic situation. He added that the Federal Reserve will implement the strategy of tightening monetary policy in such a way as to encourage job creation and to maintain price stability in the country. Some of the MPs in the Senate believe that the reelection of Bernanke will become the right message to the financial markets. Others, however, vehemently criticized the measures taken by the Federal Reserve steps forward BBC. Ben Bernanke’s mandate expires at the end of January. U.S. President Barack Obama nominated him for another term as chairman of the Central Bank of the United States in August, but his reappointment must be confirmed by the Senate.
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