Fed Chief Unveils His Stimulus Plan
February 11th, 2010 - 8:24 pm ICT by GDBy Ranjan Bhaduri
Feb 11, (THAINDIAN NEWS) The chairman of Federal Reserve, Ben Bernanke, is clearly in a tricky situation as he is trying to rein in the stimulus aid of the US government without antagonizing the Congress. He started outlining the strategy of the central bank meant for controlling the flow of Stimulus money after the recovery of US economy is achieved. He said that the Fed is likely to tighten credit and for that the interest rate banks get paid from it will be hiked. His hinting at the pull back of financial aid comes at a time when the economy has shown initial signs of recovery from the bad phase.
Even President Barack Obama is pushing for tax relaxations so that more jobs can be generated. Ben Bernanke said that the Fed has not zeroed in on the exact time to raise interest rates and put a break to the flow of the stimulus money. He tried to focus on the fact that his blueprint for the Fed operations has been made for reducing the drain of stimulus money without putting the economy into danger. The Fed chief presented a prepared speech to the Financial Services Committee of the House and it contained the exit strategy for Fed from low rates and stimulus.
It is obvious that Ben Bernanke’s biggest challenge is deciding the way and time to withdraw the stimulus. His second term began last week. He cannot afford to take any step that may aggravate the unemployment in the nations and give the Republicans a chance of lashing out at the Government.
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