As reported by Matt Nesto, the day before we got that blowout January jobs report last week, Federal Reserve Chairman Ben Bernanke delivered his semi-annual testimony on the economy before members of Congress. The Q&A session that followed opened the forum for Bernanke to get grilled by both Republicans and Democrats. One side blasted his low rate policy, and the other saying he’s not doing enough to bolster the economy.
It’s not uncommon for the Fed chief to serve as a punching bag, according Vincent Reinhart, Chief U.S. Economist at Morgan Stanley and the former Director of the Division of Monetary Affairs at the Federal Reserve in the attached video. And with 8.3% unemployment “they still have room to be accommodative, at least for a while.”
For his part, Bernanke did call the recovery “frustratingly slow” and hit back at Congress (a bit) by highlighting the need for them to get the country’s fiscal house in order. Reinhart describes this as simply alerting lawmakers that we are at risk due to our “unhinged fiscal policy.”
While these sorts of budgetary warnings have been being made forever, Reinhart thinks the U.S. is currently facing “a couple of opportunities to mess things up” if action isn’t taken soon to extend unemployment benefits, the payroll tax cuts, and address the Bush tax cuts which expire in 2013.