February 10th, 2010
01:53 PM ET
13 years ago

Bernanke lays out plan for tighter money

WASHINGTON (CNNMoney.com) - Federal Reserve Chairman Ben Bernanke unveiled a blueprint Wednesday for pulling back the trillions of dollars the central bank has provided to prop up the nation's economy.

"These programs, which imposed no cost on the taxpayer, were a critical part of the government's efforts to stabilize the financial system and restart the flow of credit," Bernanke said in prepared testimony for a Capitol Hill hearing that was postponed due to snow. "As financial conditions have improved, the Federal Reserve has substantially phased out these lending programs."

But Bernanke also emphasized that the U.S. economy still needs the support of easy money policies. He said that "at some point" in the future the Fed will "need to tighten financial conditions" by raising short-term interest rates and reversing programs that pumped liquidity into the markets.

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Filed under: Ben Bernanke • Federal Reserve
soundoff (7 Responses)
  1. Jane/Seattle

    Let me guess... Since he works for Obama then it must include higher taxes.

    February 10, 2010 03:01 pm at 3:01 pm |
  2. ThinkAgain

    I know a lot of people get all up-in-arms about our government interfering with the banking system, but you know what? The banks have proven that they are irresponsible, negligent and utterly incapable of making decisions that benefit their customers.

    So they deserve to have very strict oversight.

    Think of it this way: Would a bank loan you money if you gambled away what you had, ran up huge credit card debt, defaulted on your loans and when you did get a little extra money, go blow it on a lavish party or fancy trinkets?

    I think we all know the answer to THAT one. And as long as the U.S. Government (i.e., taxpayers) guarantee their deposits, then WE get to call the shots!

    Law makers and government officials need to start representing your constituents, i.e., the American people, and not the banking industry.

    And if the banking industry can’t make a profit with reasonable regulation in place, then they don’t deserve to survive in the marketplace.

    February 10, 2010 03:17 pm at 3:17 pm |
  3. Dar

    Now your talking, Lets just hope Odumbo doesnt try to steal this money too.
    What, he already said has going to use this money when he gets his greedy little fingers on it. Oh man.
    Oh well, whats another trillon dollars, just chump change for Odumbo.
    But it is about time we raised the interest rates back up just a little. Time for the banks to start paying us for the use of our money.

    2010/2012 REAL Change is coming

    February 10, 2010 03:30 pm at 3:30 pm |
  4. Fair is Fair

    Translation –

    "The policies of the Obama administration have both devalued the dollar so much and made the US a high-risk debtor that we will be forced to raise interest rates as a hedge against runaway inflation."

    Welcome back, Carter... this time to a Banana Republic.

    February 10, 2010 03:37 pm at 3:37 pm |
  5. SocialismBad

    And when interest rates rise the American people will feel the full pain of all this debt and spending of the Democrats! Watch the interest payments on the debt BALLOON and drive the deficits up even further.

    Financial judgment day is quickly approaching.

    February 10, 2010 03:38 pm at 3:38 pm |
  6. Ryan

    Let the right wing scream about "wasteful spending " and "tax and spend" talking points until they're blue in the face.

    At least now we have a president who is avoiding more costly wars and putting them on Uncle Sam's credit cards – A concept that never occurred to Bush or his acolytes.

    February 10, 2010 03:52 pm at 3:52 pm |
  7. Gerry NH

    The first thing that must be done is put handcuffs on Obama.

    February 10, 2010 04:14 pm at 4:14 pm |