Bernanke is Expected to Inform Congress About Foreclosure Measures Previously Taken

Ben Bernanke, the chairperson of Federal Reserve is expected to inform Congress about the various foreclosure prevention measures that have been taken previously and its impact on the economy. The questions from the Congress will focus on the bailouts made with money from the taxpayer’s kitty. There are serious concerns that the exceptional steps being taken by the Federal Reserve might result in inflation in the near future.

A fresh report is scheduled to be given by Bernanke about the health of the economy. The legislators are in a skeptical mood and not happy with the move by the Obama government to extend the overseeing powers of the Federal Reserve that will give it powers to review the activities of internationally connected firms whose failures are now imperiling the entire nation.

In all likelihood Bernanke will continue to stress on the belief of the central bank that given some more time in the last half of this year the economy will start to pickup. The low interest rates will give it the fillip. Obama’s $787 stimulus package including generous tax cuts together with spending by the government will soon begin to tell.

Spending by the consumer appears to have stabilized and so too the sale of new houses. The decline is capital spending is not as grim as it looked when the year began according to reports from Federal Reserve. Economist Bill Cheney of John Hancock Financial Services commented that the message of Bernanke is “guardedly optimistic.” There are signs of a turnaround about to take place but it still has not happened.

For Bernanke it will be tight rope walking to navigate the economy towards the path of recovery from recession. He has to do the balancing act economically as well as politically.

The economy dipped at an annual average rate calculating to 5.9% during the last quarter of 2008 and the first quarter of this year. Since the last half a century this has been the weakest performance. Some analysts think that during the second quarter the economy did not shrink as much as it did in the previous quarters.

This has given rise to optimism that from the third quarter it will start to move upwards. The pace of recovery however is continuing to worry the Federal Government. This is causing the unemployment rate to shoot up. It has broken a record of 26 years and touched 9.5%. The signs indicate that unemployment will continue to spiral up.