Here are some comments by Ben Bernanke on the current economic situation.
The economy is showing tentative signs of stabilisation. A levelling out of economic activity is the first step toward recovery.
However, he cautioned that we will not have a sustainable recovery without a stabilisation of our financial system and credit markets. Mounting unemployment, declining home values and tight credit are also likely to curb consumer spending.
Limited inflation pressures will allow policy makers to keep interest rates near zero for an extended period. While some rescue measures may have to be removed in future to curb an expected rise in inflation, he said the time had not yet come and the Fed was exploring an expansion of the types of credit made available through its programme to restart securitization markets.
A potential wave of defaults in commercial real estate may present a “difficult” challenge for the economy.
This article posted at WSJ shows The Fed’s various options to tighten monetary policy (to control inflation) when the economy ultimately recovers.
Here are some videos of Bernanke and some intense questioning by Ron Paul and Alan Grayson. Not forgetting one by Peter Schiff.