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Live Webcast Of Bernanke Testimony To Congress
Today's second most important event is the testimony of Bernanke before the House Financial Services Committee (yes, Maxine Waters will be there). Lawmakers will question him about the Fed's plans on avoiding inflation and the current unemployment rate. Committee members are also expected to inquiry about fiscal policy, the status of the nation's economic recovery, the impact of rising gas prices, and the debt crisis in Europe. Most importantly, Benny will be asked to testify on when more QEasing is coming as the markets need their fix. Watch it live at C-Span after the jump.
Testimony Highlights:
- BERNANKE SEES `POSITIVE DEVELOPMENTS IN THE LABOR MARKET'
- BERNANKE: GAS PRICES LIKELY TO TEMPORARILY PUSH UP INFLATION
- BERNANKE: UNEMPLOYMENT `ELEVATED,' PRICE OUTLOOK `SUBDUED'
- BERNANKE SAYS HIGHLY ACCOMMODATIVE STANCE MEETS BOTH FED GOALS
- BERNANKE SAYS FALL IN UNEMPLOYMENT `MORE RAPID' THAN EXPECTED
- BERNANKE SAYS `THE JOB MARKET REMAINS FAR FROM NORMAL'
- BERNANKE SAYS `CRITICAL' CHALLENGES REMAIN FOR EURO ZONE
Full Testimony (link)
Semiannual Monetary Policy Report to the Congress
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
February 29, 2012
Chairman Bachus, Ranking Member Frank, and other members of the Committee, I am pleased to present the Federal Reserve's semiannual Monetary Policy Report to the Congress. I will begin with a discussion of current economic conditions and the outlook and then turn to monetary policy.
The Economic Outlook
The recovery of the U.S. economy continues, but the pace of expansion has been uneven and modest by historical standards. After minimal gains in the first half of last year, real gross domestic product (GDP) increased at a 2-1/4 percent annual rate in the second half.1 The limited information available for 2012 is consistent with growth proceeding, in coming quarters, at a pace close to or somewhat above the pace that was registered during the second half of last year.
We have seen some positive developments in the labor market. Private payroll employment has increased by 165,000 jobs per month on average since the middle of last year, and nearly 260,000 new private-sector jobs were added in January. The job gains in recent months have been relatively widespread across industries. In the public sector, by contrast, layoffs by state and local governments have continued. The unemployment rate hovered around 9 percent for much of last year but has moved down appreciably since September, reaching 8.3 percent in January. New claims for unemployment insurance benefits have also moderated.
The decline in the unemployment rate over the past year has been somewhat more rapid than might have been expected, given that the economy appears to have been growing during that time frame at or below its longer-term trend; continued improvement in the job market is likely to require stronger growth in final demand and production. Notwithstanding the better recent data, the job market remains far from normal: The unemployment rate remains elevated, long-term unemployment is still near record levels, and the number of persons working part time for economic reasons is very high.2
Household spending advanced moderately in the second half of last year, boosted by a fourth-quarter surge in motor vehicle purchases that was facilitated by an easing of constraints on supply related to the earthquake in Japan. However, the fundamentals that support spending continue to be weak: Real household income and wealth were flat in 2011, and access to credit remained restricted for many potential borrowers. Consumer sentiment, which dropped sharply last summer, has since rebounded but remains relatively low.
In the housing sector, affordability has increased dramatically as a result of the decline in house prices and historically low interest rates on conventional mortgages. Unfortunately, many potential buyers lack the down payment and credit history required to qualify for loans; others are reluctant to buy a house now because of concerns about their income, employment prospects, and the future path of home prices. On the supply side of the market, about 30 percent of recent home sales have consisted of foreclosed or distressed properties, and home vacancy rates remain high, putting downward pressure on house prices. More-positive signs include a pickup in construction in the multifamily sector and recent increases in homebuilder sentiment.
Manufacturing production has increased 15 percent since the trough of the recession and has posted solid gains since the middle of last year, supported by the recovery in motor vehicle supply chains and ongoing increases in business investment and exports. Real business spending for equipment and software rose at an annual rate of about 12 percent over the second half of 2011, a bit faster than in the first half of the year. But real export growth, while remaining solid, slowed somewhat over the same period as foreign economic activity decelerated, particularly in Europe.
The members of the Board and the presidents of the Federal Reserve Banks recently projected that economic activity in 2012 will expand at or somewhat above the pace registered in the second half of last year. Specifically, their projections for growth in real GDP this year, provided in conjunction with the January meeting of the Federal Open Market Committee (FOMC), have a central tendency of 2.2 to 2.7 percent.3 These forecasts were considerably lower than the projections they made last June.4 A number of factors have played a role in this reassessment. First, the annual revisions to the national income and product accounts released last summer indicated that the recovery had been somewhat slower than previously estimated. In addition, fiscal and financial strains in Europe have weighed on financial conditions and global economic growth, and problems in U.S. housing and mortgage markets have continued to hold down not only construction and related industries, but also household wealth and confidence. Looking beyond 2012, FOMC participants expect that economic activity will pick up gradually as these headwinds fade, supported by a continuation of the highly accommodative stance for monetary policy.
With output growth in 2012 projected to remain close to its longer-run trend, participants did not anticipate further substantial declines in the unemployment rate over the course of this year. Looking beyond this year, FOMC participants expect the unemployment rate to continue to edge down only slowly toward levels consistent with the Committee's statutory mandate. In light of the somewhat different signals received recently from the labor market than from indicators of final demand and production, however, it will be especially important to evaluate incoming information to assess the underlying pace of economic recovery.
At our January meeting, participants agreed that strains in global financial markets posed significant downside risks to the economic outlook. Investors' concerns about fiscal deficits and the levels of government debt in a number of European countries have led to substantial increases in sovereign borrowing costs, stresses in the European banking system, and associated reductions in the availability of credit and economic activity in the euro area. To help prevent strains in Europe from spilling over to the U.S. economy, the Federal Reserve in November agreed to extend and to modify the terms of its swap lines with other major central banks, and it continues to monitor the European exposures of U.S. financial institutions.
A number of constructive policy actions have been taken of late in Europe, including the European Central Bank's program to extend three-year collateralized loans to European financial institutions. Most recently, European policymakers agreed on a new package of measures for Greece, which combines additional official-sector loans with a sizable reduction of Greek debt held by the private sector. However, critical fiscal and financial challenges remain for the euro zone, the resolution of which will require concerted action on the part of European authorities. Further steps will also be required to boost growth and competitiveness in a number of countries. We are in frequent contact with our counterparts in Europe and will continue to follow the situation closely.
As I discussed in my July testimony, inflation picked up during the early part of 2011.5 A surge in the prices of oil and other commodities, along with supply disruptions associated with the disaster in Japan that put upward pressure on motor vehicle prices, pushed overall inflation to an annual rate of more than 3 percent over the first half of last year.6 As we had expected, however, these factors proved transitory, and inflation moderated to an annual rate of 1-1/2 percent during the second half of the year--close to its average pace in the preceding two years. In the projections made in January, the Committee anticipated that, over coming quarters, inflation will run at or below the 2 percent level we judge most consistent with our statutory mandate. Specifically, the central tendency of participants' forecasts for inflation in 2012 ranged from 1.4 to 1.8 percent, about unchanged from the projections made last June.7 Looking farther ahead, participants expected the subdued level of inflation to persist beyond this year. Since these projections were made, gasoline prices have moved up, primarily reflecting higher global oil prices--a development that is likely to push up inflation temporarily while reducing consumers' purchasing power. We will continue to monitor energy markets carefully. Longer-term inflation expectations, as measured by surveys and financial market indicators, appear consistent with the view that inflation will remain subdued.
Monetary Policy
Against this backdrop of restrained growth, persistent downside risks to the outlook for real activity, and moderating inflation, the Committee took several steps to provide additional monetary accommodation during the second half of 2011 and early 2012. These steps included changes to the forward rate guidance included in the Committee's post-meeting statements and adjustments to the Federal Reserve's holdings of Treasury and agency securities.
The target range for the federal funds rate remains at 0 to 1/4 percent, and the forward guidance language in the FOMC policy statement provides an indication of how long the Committee expects that target range to be appropriate. In August, the Committee clarified the forward guidance language, noting that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--were likely to warrant exceptionally low levels for the federal funds rate at least through the middle of 2013. By providing a longer time horizon than had previously been expected by the public, the statement tended to put downward pressure on longer-term interest rates. At the January 2012 FOMC meeting, the Committee amended the forward guidance further, extending the horizon over which it expects economic conditions to warrant exceptionally low levels of the federal funds rate to at least through late 2014.
In addition to the adjustments made to the forward guidance, the Committee modified its policies regarding the Federal Reserve's holdings of securities. In September, the Committee put in place a maturity extension program that combines purchases of longer-term Treasury securities with sales of shorter-term Treasury securities. The objective of this program is to lengthen the average maturity of our securities holdings without generating a significant change in the size of our balance sheet. Removing longer-term securities from the market should put downward pressure on longer-term interest rates and help make financial market conditions more supportive of economic growth than they otherwise would have been. To help support conditions in mortgage markets, the Committee also decided at its September meeting to reinvest principal received from its holdings of agency debt and agency mortgage-backed securities (MBS) in agency MBS, rather than continuing to reinvest those proceeds in longer-term Treasury securities as had been the practice since August 2010. The Committee reviews the size and composition of its securities holdings regularly and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in the context of price stability.
Before concluding, I would like to say a few words about the statement of longer-run goals and policy strategy that the FOMC issued at the conclusion of its January meeting. The statement reaffirms our commitment to our statutory objectives, given to us by the Congress, of price stability and maximum employment. Its purpose is to provide additional transparency and increase the effectiveness of monetary policy. The statement does not imply a change in how the Committee conducts policy.
Transparency is enhanced by providing greater specificity about our objectives. Because the inflation rate over the longer run is determined primarily by monetary policy, it is feasible and appropriate for the Committee to set a numerical goal for that key variable. The FOMC judges that an inflation rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with its statutory mandate. While maximum employment stands on an equal footing with price stability as an objective of monetary policy, the maximum level of employment in an economy is largely determined by nonmonetary factors that affect the structure and dynamics of the labor market; it is therefore not feasible for any central bank to specify a fixed goal for the longer-run level of employment. However, the Committee can estimate the level of maximum employment and use that estimate to inform policy decisions. In our most recent projections in January, for example, FOMC participants' estimates of the longer-run, normal rate of unemployment had a central tendency of 5.2 to 6.0 percent.8 As I noted a moment ago, the level of maximum employment in an economy is subject to change; for instance, it can be affected by shifts in the structure of the economy and by a range of economic policies. If at some stage the Committee estimated that the maximum level of employment had increased, for example, we would adjust monetary policy accordingly.
The dual objectives of price stability and maximum employment are generally complementary. Indeed, at present, with the unemployment rate elevated and the inflation outlook subdued, the Committee judges that sustaining a highly accommodative stance for monetary policy is consistent with promoting both objectives. However, in cases where these objectives are not complementary, the Committee follows a balanced approach in promoting them, taking into account the magnitudes of the deviations of inflation and employment from levels judged to be consistent with the dual mandate, as well as the potentially different time horizons over which employment and inflation are projected to return to such levels.
Thank you. I would be pleased to take your questions.
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damn it i just missed ron paul chewing him out
The con man is back on the news perfectly timed to kill gold and silver. This is fucking disgusting.
Thanks for making it cheaper, guys.
Silver Cartel Counterfeits 225 Million SLV Shares in 30 Minutes
fixed it for you
Had to take off my Dow 13,000 cap again.
I'd propose getting a cap with a LED or LCD display, wire it up to your blackberry. That way you won't get a rash from so much cap installation and removal.
As an added bonus, you could program it to flash OIL BITCHEZ! Every time you see a news piece about Iran.
Did she just say "consentoids?"
Maxine Waters- Could we give away some free money, aka principal reduction, to my peeps!?
only if OneUnitedBank is made whole with tax-payer funds.
Since Peggy Joseph is all paid up on her gas & mortgage, she told Maxine to get her an IPad & a large bucket...
How much in dollar swaps did you commit, dear chairman?
The hyperinflation of the dollar will go on as long as it has to.
Maxine Waters- How else could you get some of the Obama cash to my peeps and spur on another housing bubble?
http://i43.tinypic.com/91i69c.png
Question him? Surely not.... they will just ask him statements that he gave them to say to him
motion sickness bags and/or whoopie cushions provided
You know what is worse than a national bank? A privately controlled national bank.
The fed is detroying our dollar not to spur any economic activity, they are doing it to not cause a debt crisis. They are not helping the economy, they are systemically destroying it. No one wants to invest in certain economic strategy that create jobs, if return on investment is less than just sitting on PMs.
Why not go back to Bawney and spewing his talking point that everyone on the government dole is doing great.
Rep Maloney thanked Bernanke for his "public service." Said with not a hint of sarcasm.
"I thank you for your brave and inovative leadership" ... THAT'S IT. I HAVE OFFICALLY SNAPPED ... SOMEBODY FETCH ME MY RED RYDER BB GUN ... ;)
Finally, a "BTFD" moment.
Keep blaming the crisis from 3 years ago. Do not bring up the FACT that it is all about return on investment, LIAR!!!!
I cannot make the stupid decision to take a risk with my assets creating jobs, if the ROI is less than just sitting on PMs.
What RECOVERY?
He just stated that we will have to cut spending and have vast increase in taxes. Sorry buddy, me no paying my taxes anymore. Me be on the new underground economy. Let us see how much longer you can keep the serfs in them chains.
B.B...B.....B......B.....B....BULLSHIT! (BULLISH??!!)
Here you go, watch this clown and see what if anything he says today is either the truth or has any possibility of happening. GREAT UTUBE!
http://www.youtube.com/watch?feature=player_embedded&v=MnekzRuu8wo
I have a solution, let us make snow are new fiat currency!
I am going to go shovel a bunch of money now! You peeps in the south are just going to have to suck it.
Ben Benarke off record at the bar:
"And in the meantime we will be buying all the toxic mortgages in the USA, because when when the smoke and fumes settle down,
the FED will own over 1/2 the homes in the USA. Take that to BANK.......Wait a minute.....I am the BANK . HA HA HA HA HA HA
Curious development with the fed agents showing up into the insurance companies.
pretty awesome how ben shalom speaks and PMs get faceraped.
Think of Bernanke as the smoke grenade . . . and Blthye's monkeys as the spec ops team behind it.
So gold is dropping because the Ben Bernak is easing worried markets with his wisdom?
Guess I gonna buy this dip :)
Interest rates are too high, we cant go below 0 - The Ben Bernak
This is great... We live in a time when future generations will mock us for stupidity
gold down $68. Blythe is pissed. Can't have the PM's working for too long.
Arrest him. Throw the fucker into jail. Call the police. He's worse than a pedophyle. Look his neck is getting shorter. Trying to hide from the noose. Arrest that fucker.
http://www.youtube.com/watch?v=O2KeBfy34mQ&feature=player_embedded
The Congresswoman just asked Bernanke how she should invest in a climate of rising rates! Bwahahahaha!
Fuck off Nan Hayworth
Am I the only one that wants to HF her?
Man the American people elect some real fucking retards.
If people this dumb can be elected to Congress, how dumb exactly is our population?
Go stand in line at the grocery store. Just keep an eye out for puddles of drool.
Long overnight gold and silver, short US markets. The winningest trade on the planet.
Question is, who keeps losing?
Oh, and thank you US markets for yet another buying op! Normally I am against subsidies, but since these benefit me, I find it hard to work up much resistance.
"Why are gasoline prices so high?" "huhuhu.... Iran!"
Looks like the US is in such a "massive economic recovery" that it only took $4.00 a gallon gas and $109 oil to crash it, not the predicted $5 and $150. LMFAO! Just imagine $5+ and $200???? No wonder Obama is trying to ease Israel(so the story goes anyhow).
I watched a 60 min episode last night talking about the new 80hr workweek, people connected all the time thru technology. "oh I love what I do!!"" Oh bullfuckingshit you stupid cunt, you're a fucking suck ass pole smoker and thanks for selling the rest of us out.
Now that i've not officially been in the workforce for 4 years and totally involved in the black market I can clearly see the insanity of the current system. What a fucking joke ill never take part in it again, not anymore than I have to anyways. Unless you want to put on a backpack and start walking the tracks you'll always be involved to an extent.
Wanna see blatant proof of fraud?
With gold up, Bennie and the Mainstream will start indicating that more QE might not happen, forcing the price of gold and silver down to artificially low levels.
Then they and their buddies will buy large amounts of it at depressed prices.
Then in a week or so, they will start saying that QE is going to be necessary after all. They do this every damn month, and still the stupid public doesn't learn.
This whole damn thing is fraud and nothing but fraud. The US dollar is worthless, and the paper fantasy is just organized crime on a grand scale.
Read:
http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref
Well, no change from the last one. AND THERE WILL BE NO QE3. very easy to read that esp as the employment rate and housing improvements are done for the year. Ready today's data based Economic updates at http://advantages.us (repeated by the editor below, I don;t know I didn;t do it..
Barney was fun to listen too. and Paul quite showed why he did not rise up
QE3 ? ? ?
Dude, we're already on QE10...
Well, no change from the last one. AND THERE WILL BE NO QE3. very easy to read that esp as the employment rate and housing improvements are done for the year. Ready today's data based Economic updates at http://advantages.us
so congress goes to the head of a central bank to find out how things are going?
the elected officials, the representatives put in place by the people go to the unelected, bureaucratic banksters to find out what said central bank is going to do next? and most of these lemmings all but trip over themselves to praise bernanke, even though said lemmings were supposed to be active participants in such decision making procedures.
I am fairly certain it's in the job description.
yet as made apparent by this and other farce meetings, our representatives don't have a clue as to what is going on and further seem perfectly happy to abdicate there duties and hand the whole show over to bernanke and his ilk. so why even bother to keep up the charade?
just cancel the race for teleprompter in chief 2012, go Greek and install B as the new head of state and stop insulting the intelligence of any American who can see past this absurd mockery of government of the people, by the people and for the people.
Oh and btw Ron Paul holds up a silver eagle in front of Ben today and look what happens to gold and silver!!!
Pure coincidence. Our markets are free and fair!
PM bugs secretly hope for paper currency to be printed to oblivion--to be replaced by PM fiat. Fiat currency has deceptively become synonymous with paper currency, but any currency which must be the medium of legal transactions is endowed with fiat. All of the problems which now are popularly thought to be derived from the intangibility of the currency's backing are in fact caused by this medium of violent force which renders legal tender monopolizable.
Did monetary tyranny in America begin with Nixon? With W. Wilson? No... go back to the very beginning; various founding fathers and esteemed early presidents waged war (both rhetorical and real) on the banks, and ultimately lost. Yet the banks are not the problem--they only use the law (that is, the fiat) to their own advantage.
I would love to zero rate my foot right up that Mother f$7ks ass
Bernanke just said the counterparty to the FX swaps (the ECB) is "well-capitalized".
The ECB is levered 39:1 after this LTRO. Ben has swapped dollars for euros at a "friendly" rate. The ECB cannot print dollars, only euros. Somebody who is levered 39:1 who owes you something he doesn't have might not be the classical definition of well capitalized, much less a good credit risk.
Ron Paul Punk Rock Anthem- http://www.youtube.com/watch?v=eWC_0jPFQ_Q
Notice the raid on gold corresponded exactly with beginning of drool bucket being moved into position and the Printer being hoisted into it?
I'm waiting for someone to ask Bernanke:
Geithner has gotten the $16 trillion of US debt down to a duration of about 4 years, and banks are refinancing mortgages, which are long term assets, at 4%. What happens---to the deficit and to the banks margins---when rates eventually rise? How does the Federal Government fund itself when it has to pay 5%? What happens to banks when they have to match book, but their funding costs are above the rate of return on their long term assets?
Congress just spent their time asking Bernanke how they should invest in a market with rising rates. They have no care to how we the people will manage our clusterfuck of an economy.
D-texas Al green, what this guy is talking about?
"Down is bad. Up is good! Down is wrong. Up is right! Down is worse. Up is better!"
Would someone please shoot me now? /sigh
"if down is bad then up is good"
The Senator has no clue.
It is an unenviable position to be in, as is evidenced by his quivering voice. We've never been here before and he's dealing with it with voodoo economics. And everyone is looking at him like he knows.
He is deflecting responsibility from the Fed to Congress. He is getting defensive. I think Shit is about to HTF. Let's give it a few weeks, but something wicked is coming.
Only the blind have confidence now. A "confidence issue" is definitely coming.
The effects of ECB LTRO 2 on EUFN and EUR/USD so far, today:
http://www.strawberryblondesmarketsummary.com/2012/02/effects-of-ecb-ltro-2-on-eufn-and.html
What he didn't bother to mention was that the price of gasoline will soon skyrocket to $100 a gallon because of his spending spree
We should all be thankful to be enslaved by such a kind central banking God
He makes Satan seem like baby Jesus
These dam things are just a bunch of political statements...worthless if you ask me.
The worldwide financial house of cards is built on precisely "nothing". If you understand that litterally, the entire edifice is just a conjurers trick of accounting sleight of hand maintained by its acceptance by a few billion victims who apparently don't object to a slow process of wealth extraction that impoverishes them in order to enrich a few thousand "elite" individuals, you know all you need to know. The whole system of wealth extraction is built on nothing other than our silent assent (voting) and tacit acceptance of fiat currency and especially "credit". Obtaining this "credt" is demonstrably irrational and tantamount to begging to be fleeced, an incredibly sad state of affairs brought about by cultural media mind control.
These instances of testimony by Bernanke in front of totally clueless, with a few exceptions, House members is theatre of the absurd of the highest order.