Bernanke Unshaken By Bad Economic News

Fed Chairman Says High Unemployment, Skyrocketing Gas Prices Belie The Economy's Strength

(AP)  Despite a recent spike in the unemployment rate, the danger that the U.S. economy has fallen into a "substantial downturn" appears to have waned, Federal Reserve Chairman Ben Bernanke said Monday.

Addressing a Fed conference in Chatham, Massachusetts, on Monday night, Bernanke said a government report last week showing the unemployment rate rising from 5 percent in April to 5.5 percent in May - the biggest one-month jump in two decades - was "unwelcome." However, the Fed chief said other forces should "provide some offset to the headwinds that still face the economy."

The Fed's powerful doses of interest rate cuts, the government's $168 billion stimulus package, further progress in the repair of problems in financial and credit markets, a gradual ebbing of the drag from the deep housing slump and still solid demand from abroad for U.S. exports should help the economy over the remainder of this year, he said.

Although economic activity is "likely to be weak" during the current April-to-June quarter, Bernanke said "the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."

Last Friday fears were rekindled that the country could be headed for a deep recession after the unemployment rate zoomed and oil prices registered their biggest single-day leap.

However, Bernanke said, "Recent incoming data, taken as a whole, have affected the outlook for economic activity and employment only modestly."

Still, soaring energy prices are a double-edged sword for the country. Oil prices closed Monday at $134.35 a barrel, down from last week's high of $139.12 a barrel. They risk putting a further damper on growth as well as spreading inflation through the economy, Bernanke said.

"Inflation has remained high," largely reflecting sharp increases in the prices of globally traded commodities, Bernanke said. "The latest round of increases in energy prices has added to the upside risks to inflation and inflation expectations," he said.

The Fed is paying close attention to the extent to which consumers, investors and businesses believe prices will rise in the future, he said. If consumers, investors and businesses believe inflation will continue to go up, they will change their behavior in ways that aggravate inflation, turning it into a self-fulfilling prophecy.

The Fed "will strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as for inflation," Bernanke said.

Bernanke spoke Monday evening to a conference on understanding inflation and the implications for Fed policymakers in setting interest rates. The forum was sponsored by the Federal Reserve Bank of Boston. His comments on the economy's outlook were fairly brief and were part of a larger, mostly academic speech.

Last week, Bernanke sent his strongest signal yet that the Fed's rate-cutting campaign was probably over for now because of growing concerns that soaring oil and other commodity prices - along with a weakened dollar - are aggravating inflation.

To help brace the economy, the Fed dropped rates in late April to 2 percent, a nearly four-year low, continuing a rate-cutting campaign that started last September.


Many economists believe the Fed will hold rates steady at its next meeting on June 24-25 and probably through much, if not all, of this year. However, some believe inflation could flare up and force the Fed to begin boosting rates later this year or next year.

Inflation forecasting is important to Fed policymakers when determining the best course on interest rates. Even with extensive research over the years, much remains to be learned about both inflation forecasting and inflation control, Bernanke said. And there are areas where additional research could prove helpful.

Policymakers and analysts often have relied on information from commodity futures markets to help shape inflation forecasts, Bernanke said. In recent years, though, information from futures markets has "underpredicted commodity price increases ... leading to corresponding underpredictions of overall inflation," he said. The "poor recent record" on that front raises the question of whether policymakers should continue to use this source of information and, if so, how, Bernanke said.

Despite the recent record, Bernanke said he didn't think it was reasonable to ignore information about supply and demand culled by futures markets. However, it does seem reasonable, he said, to treat such information as highly uncertain.

Working to make economic data timelier and more accurate also would be useful to policymakers trying to divine inflation's direction. Moreover, it would also be helpful for policymakers to know more about how people's inflation expectations are influenced by Fed interest rate actions, Fed communications and economic developments such as oil price shocks.

"Much evidence suggests that expectations have become better anchored than they were a few decades ago, but that they nonetheless remain imperfectly anchored," Bernanke said.

[wogerwabbit]

He looks like he''s about to start crying... he probably just filled up his gas tank on the way to work. I know the $64 I paid yesterday to fill my tank brought tears to my eyes.

[stn_sage]

Bernanke is a stooge! A stooge with his hand out! He''s a typical Bush appointee---he''s goes in front of the camera and says whatever he was TOLD to say!

Proof of this is that he''s NEVER been correct about ANYTHING yet---and HE''S just not that dumb!

If you make any decisions based on what he says, you''re screvved! Fortunately, when Bush''s administration is over, hopefully the next president will appoint a new Fed chief! There''s gotta be more capable people out there than Bernanke!

[ubrew12]

Federal Reserve Chairman Ben Bernanke said "the danger that the U.S. economy has fallen into a ''substantial downturn'' appears to have waned"

Did he have his fingers crossed behind his back when he said it?

[rickstas]

Goes to show -- he''s as out of touch as his boss. I hope Barak Obama shows everybody Bush appointed the door on his first day in office.

[naucoming4u]

Our government... in its current form...

...has been known to manipulate and lie about data... of various types throughout history.

It is then, a foregone conclusion that our government... in its current form... pressures the "economists" and then manipulates the data they put out, to ensure that the real news of the economy in the U.S. is never realized or known (for their own political gain and future). So, therefore, the REAL news/data is never really known among the American populace... UNLESS...

...you happen to be in the economic group of 95% of the population... and have an IQ above room temperature, where not only do you understand the REALITY of the economy... but you are living it and dealing with it every day!

[shanev137]

The guy is a freaken idiot. He should have started raising interest rates a long time ago and we wouldn''t be in this mess. You don''t drop interest rates to the floor while commodities prices are going to the moon...because you create more inflation. Take an Econ101 class you dummy.

Thanks to the FED nobody in the investment world now wants anything to do with all our worthless dollars floating around out there.

Thanks a lot you idiot.

[incog-nito]

Bernanke: I''m not concerned about the state of the econmy. Unlike most Americans, I''m filthy rich.

[wardoglrs]

We were warned about Central Banks from the forefarthers and they were right, They fought this very thing from happening here thats why its called America you fool''s you been had by the very thing they gave there lives to for you and your familys. Now its all in vain cause you all have been dumb downed by them since you were born. You are there slaves dont believe me? Try not paying taxes and tell me who owns who. The foreFarthers never wanted you to live like this. They created the constitution for you
to have rights from goverment. Just read it on the web
its right there. It blows me away what you have put up with America. Wake up to Dr Paul and take this country back.

[sistatee-2009]

The Fed is worried about inflation? Hello! THE FED CAUSES INFLATION BY PRINTING UP TRUCKLOADS OF PAINTED PAPER AND THEN CALLING IT MONEY! Bernanke..go suck the muzzle of a pistol, you stinking B-TCH!

[nearl4511]

This is kind of a funny article.

Bernanke has been the Stock Market''s Bi tch ever since he got in there. (OH OH Bear Stearns- OH OH help make more money available, Woo Woo).

The only thing surprising is that the Fed loan interest rates haven''t gone negative, "cause this fella is in the stock market''s pocket.

[randynason]

The White House and boot-licking tools like Bernanke have consistantly underplayed the story of the bad economy. What a lying bunch of half-as*ed douch*bags, who underestimate the people''s ability to know the difference.

[cyberus-2009]

Of course he is unshaken, his job is safe no matter how bad the economy gets.

[inventagod2]

Bernanke is more concerned about his boss being impeached - Dennis Kucinich is going after Bu$h this week...

[vnveteran72]

(AP) Despite a recent spike in the unemployment rate, the danger that the U.S. economy has fallen into a "substantial downturn" appears to have waned, Federal Reserve Chairman Ben Bernanke said Monday.

Addressing a Fed conference in Chatham, Massachusetts, on Monday night, Bernanke said a government report last week showing the unemployment rate rising from 5 percent in April to 5.5 percent in May - the biggest one-month jump in two decades - was "unwelcome." However, the Fed chief said other forces should "provide some offset to the headwinds that still face the economy."

Give me three of whatever Old Ben''s Smokin''.....

[alphaa10-2009]

The oil-fueled economic roller coaster gave Bernanke only a few seconds for a few Greenspan-style ambiguities that all is well-- if that is what you want to hear.

Bernanke must have worked PR for a bush-league chamber of commerce, for this is a clear exercise in "Let''s Not Panic, Folks!"

Unemployment has not improved, the housing sector is flat, and now-- just in time to do its patriotic duty-- the Big Oil majors arrive to raise the cost of living.

Bernanke should be waving his fist angrily at the mortgage bankers for their unregulated greed, dashing the hopes of millions of homeowners and sending economic shockwaves through the economy.

Bernanke should be shouting in outrage that a few oil companies dare to plunder the wallets of America, simply because they know Bush will not interfere with a robbery-in-progress.

And Bernanke should go before congress to demand repeal of the GOP-brokered subsidy from US taxpayers. Few taxpayers, in fact, even realize the billions in subsidy is there!

Instead, Bernanke grows a beard, and goes into Zen-like statements which serve no purpose but obfuscation. That, apparently, is the entire purpose.

[alphaa10-2009]

The oil-fueled economic roller coaster gave Bernanke only a moment for a few Greenspan-style ambiguities that all is well-- if that is what you want to hear.

Bernanke must have worked PR for a bush-league chamber of commerce, for this is a clear exercise in "Let''''s Not Panic, Folks!"

Unemployment has spiked, the housing sector is flat, and now-- just in time to do its patriotic duty-- the Big Oil majors arrive to raise the cost of living.

Bernanke should be waving his fist angrily at the mortgage bankers for their unregulated greed, dashing the hopes of millions of homeowners and sending economic shockwaves through the economy.

Bernanke should be shouting in outrage that a few oil companies dare to plunder the wallets of America, simply because they know Bush will not interfere with a robbery-in-progress.

And Bernanke should go before congress to demand repeal of the GOP-brokered subsidy to Big Oil from US taxpayers. Few taxpayers, in fact, even realize the billions in subsidy is there!

Instead, Bernanke grows a beard, and goes into Zen-like statements which serve no purpose but obfuscation. Deceit, apparently, is the entire purpose.

[lemonskink]

I wouldn''t believe a word spoken out of an illegal operation called the Federal Reserve. Ever. They just don''t want the panic to set in.

[ricklf1]

Somebody has to wake up Bernake please, and his buddy Bush. Their failed Economic policy has led this country to the brink of a 30''s style Depression. How many more times can the FED cut interest rates to pump up a dead economy. Just wait until the US Dollar is worthless against other currencies and we must pay of oil with EUROS....what then?

[naucoming4u]

As a government appointee... do you have to be correct in your findings?... NO!

As a government appointee... do you have to be mindful of your actions?... NO!

As a government appointee... do you have to care about the results of your actions?... NO!

Why?

Because in the highest levels of the Federal government no matter what happens, even in the worst case scenario (nuclear WW3), these government appointees will merely be SHELTERED from all that crumbles around them...

...including the entire country!

[ajaxtheleast]

Bernanke is going to "resist" our expectations.

It will be an epic battle of the third
dimention kind, THE PHYSICAL AGAINST THE PSYCHE !!!

I can hear the grunting and groaning
of a great tug of war ;

I EXPECT HIGHER!! / NO NO I SAY !!

YES! HIGHER!! / NO WAY !!

ANCHORS AWAY !! / NO! STEADY AS SHE GOES!!


And "UNDERPREDICTED"?

I understand, Ben, for a man with a beard
sculpted by Michaelangelo "underestimated"
is way to crass.

[samrensho]

He spews the party line and juggles the numbers. It''s an election year. The real measure is - do you have any money left over at the end of the month?

[patriot12436]

Where do they find these idiots ? I have received three letters from senators this last week telling me the economy is great and that bush is doing a fine job. The sky is falling and they say qwe are looking at sunny skies. God i hope we can wait till election timne and get all these idiots out of office.

[patriot12436]

inventagod2
Bush should be worried about being executed but i don''t think he is smart enough. He believes his own lies.

[patriot12436]

vnvetran72, you like me couldn''t afford what he smokes, we don''t make that kind of money.

[patriot12436]

rickstas
If obam gets eleted we are totally domed. I don''t want McCain either.

[patriot12436]

I just received an email about drilling for oil in enwar.
it also offered me the opportunity to send an email to president bush. I am currently overseas so am using my sons address to receive my mail stateside. I wrote and told him if he wakes up in the morning and the house is surrounded by FBI, not to be alarmed. I really don''t think they will take my email that seriously.

[rudy654-2009]

In the picture he looks like he is on sleeping pills. "Hmmm. um...yeah, the economy, yawn! like dude, it''s really, yawn! strong."

[rudy654-2009]

Posted by patriot12436 at 02:16 AM

I wonder what it is like to be totally "domed"?

[stn_sage]

Where do they find these idiots ? I have received three letters from senators this last week telling me the economy is great and that bush is doing a fine job. The sky is falling and they say qwe are looking at sunny skies
Posted by patriot12436 at 02:05 AM : Jun 10, 2008
----------------------
My response: I would guess they''re from Rep senators, but if they''re not; they certainly errantly supported Bush on numerous policies, so they desperately need to convince you that "everything" is OK!

Unfortunately, for them, you''re a thinker, and can see through their B.S.!

It''s really insulting that they would send out these ''rosy picture'' promos, in the hopes of getting your vote! But, they have to hope you''re stupid enough to believe it!! Well, enjoy!

[babooph]

None of the rich are worried-their massive tax cut has given them so much,the dividends will cover fuel ,war taxes & future major expences.

[babooph]

None of the rich are worried-their massive tax cut has given them so much,the dividends will cover fuel ,war taxes & future major expences.

[oneworldusa]

I went out for some errands. I can''t BELIEVE what people are out there spending! The economy is quite good.

We''ve been sacrificing for months, based on the news, and will continue to be thrifty, because that''s the way we are, living below our means. So, if times really do turn bad, we are prepared.

[usmcvn2]

The price of gas & food, ect., ect., is making americans hate each other more than they already do. I see angry people taking the chit out one each every where I go. Keep your powder dry, its coming!

[Gary Kempf]

Bernanke Unshaken By Bad Economic News ;

Of course he is, his "blind trust" continues to grow.

[ahrats]

Higher enery price is boosting inflation, right. So why not put controls on these higher prices and bring them down? Oh, I forgot this is free market economy where speculation throws the whole thing out of wack. How much lower can you go on interests rates down to zero or maybe negative? Bernanke if I were you I''d quit now while the rest of the Bush Administation is jumpping the sinking ship. The energy prices are unreasonable because of speculation just like the reason why the housing market was inflated and crashed. The Republican mode of hands off regulations when investors can make outrageous amount of money is what need to change. Richard Nixon had it right with the windfall profit tax.

[johngoodnews]

Times are great if you''re buying cheap money for investment in assets which have lost a chunk of their value over the last year. So keep lowering that interest rate so I can buy low and sell high. Yippee Wheeeeeeee!!!!

[mythoughtsr]

I really would like to tell these people where to put their "economic indicators". They don''t care about the little person because, a) they are not one of them, b) they have substantial salaries and perks that they don''t suffer and c) they have never stood in an unemployment line in their lives. With the cost of food rising VERY fast, gas at ridiculous prices, energy and water costs surging and salaries being stagnant, his little comment about the downturn "waning" makes me sick. Come live the life and work the budget of the WORKING MAN in this country. THEN, you''ll see how the downturn is.

[omnibus66]

Another idiot automaton in an administration where minuscule intelligence is sought after and rewarded.

The Idiot-In-Chief is wasting millions of tax dollars on a meaningless trip (vacation) to Europe while half of the people in this country say their quality of life has been reduced by higher energy and food prices.

It would be nice if these were only the people who voted for him, but unfortunately that is not the case.

223 days, 16 hours, and 22 minutes to go.

Prove you''re insane, vote for McCain.

[redstripe11]

It defies economics 101 to lower interest rates in a time of inflationary pressures. If interest rates were raised, this would help the dollar. The weaker the dollar is, the more pressure there is on oil prices as well. Except this imbecile is trying to address the housing crisis and forgetting that there is an entire economy at large to take care of.

I yen for the days of a Federal Reserve that was proactive and not reactive like the one we have now that is helping to ruin this country and it''s economy to help bail out a bunch of corrupt bankers.

[antoniof123]

Fed Chairman Says High Unemployment, Skyrocketing Gas Prices Belie The Economy''s Strength

These guys are brillant are they not! I have not seen such stupidity ever. I mean they are not scientist they are artist they make a mess and call it art.

What a joke we have in this country.

[floydzeppl]

Fed Chairman Says High Unemployment, Skyrocketing Gas Prices, Inflation, Crashed Housing Market, Lowest Homeowner Equity since WWII, Wildly Fluctuating Stock Market, Declining Retail Sales, Rising Airline Costs, Slumping Auto Sales Belie The Economy''s Strength.

Good little Shrub Worshiper.

[singingrick]

Of course, the die hard neocons are absolutely certain despite all evidence to the contrary that those huge tax breaks given to the mega-wealthy are eventually going to trickle down to the rest of the country. If, when the trickle reaches you, it looks and smells like urine, that''s because it is.

Thanks for voting Republican.

[floydzeppl]

Yeah, this is the same asssswipe that bailed out the banks with a Republican Tax Payer Giveaway Social Program.

[sayso2]

If I were driving to economic summit meetings in limos and custom tailored three piece suits eating fillet mignon and sipping fine merlots over lunch, guess I would have trouble getting psyched up about economic downturns too.

[underdogus]

Chairman Ben Bernanke you ffkken ***.hole

[underdogus]

testing a.sshole

[gopsoccermom]

Any moron can tell you this is all Clintons fault.

[underdogus]

FloydZeppl shut up you d.amn b.astard!!

[underdogus]

you got US$$$ currency you got a bulls eye on your back, and you are in Ben Bernanke cross hair.....

[singingrick]

Of course, the die-hard neocons are absolutely certain despite all evidence to the contrary that those huge tax breaks given to the super-wealthy are eventually going to trickle down to the rest of the country. If, when the trickle reaches you, it looks and smells like urine, that''s because it is.

Thanks for voting Republican.