Federal Reserve

Our policy salon tonight about the Federal Reserve and consumer protection ties in somewhat with what I have been doing recently for my internship at the German Marshall Fund. Last week I went to the Senate Banking, Housing, and Urban Affairs Committee for Federal Reserve Chairman Ben Bernanke's semiannual monetary policy report to congress. I went for my internship because as part of the Congressional Relations team at GMF, the happenings on the Hill are very applicable to what we do.

Unfortunately standing in line for 45 minutes wasn't enough to get me into the room for the hearing, so after the chairman walked down the hall I left and watched the hearing on my computer. Not as exciting as it would have been to be there, but I got all the information which is the important stuff. Here are some of the highlights of what was said.

Bernanke said the Fed was open to more security purchases if necessary. Asked what another round of security purchases would do, Bernanke said they would ease financial conditions and lower interest rates but that they might not be needed or effective. Also, he said it is important to keep the door open for all options. He also highlighted that a government default would harm the economy and make conditions even worse. He said that our treasuries are the benchmark and that our credit rating is an important asset to the world and loss of confidence would pose serious financial danger.

The talk gave a lot more interesting information about the current economic situation and potential solutions. You can watch a full recap at http://banking.senate.gov/public/

DR