Bernanke Predicts Economy Will Keep Growing
Federal Reserve Chairmen Ben Bernanke pledged to keep interest rates low so the economic recovery will stay on track. In remarks to the Economic Club of New York Monday, Bernanke said he was worried that a weak job market could prevent the expansion from being as robust as he would like.
STEVE INSKEEP, host:
Those investors may be glad to hear that on Wall Street stock prices have been on the rise. Yesterday, Federal Reserve Chairman Ben Bernanke added some words of encouragement.
NPR's Chris Arnold reports.
CHRIS ARNOLD: Not everybody is optimistic about where the economy is headed. Some experts see weakness and perhaps a relapse into recession. They point to programs such as Cash for Clunkers as short-term boosts that are not fixing the underlying problems.
But Bernanke in his speech was more upbeat - at least to a point.
Mr. BEN BERNANKE (Chairman, Federal Reserve): My own view is that the recent pickup reflects more than purely temporary factors and that continued growth next year is likely.
ARNOLD: Still, Bernanke is worried about some economic headwinds.
Mr. BERNANKE: Constrained bank lending and a weak job market likely will prevent the expansion from being as robust as we would hope.
ARNOLD: Despite such a tepidly positive forecast, the stock market has been rebounding strongly lately, and that's led to concerns that maybe stocks and other assets are rising in value too quickly.
Mark Zandi is chief economist of Moody's Economy.com.
Mr. MARK ZANDI (Moody's Economy.com): There's been some hand ringing in some circles about the run-up in stock prices in the U.S. and Asia - China particularly, commodities prices, particularly gold. The worry is that a bubble is developing in these markets and, of course, when bubbles burst they create big economic problems.
ARNOLD: But when he was asked about this, Chairman Bernanke seemed to be looking to dispel some of those fears. He said he did not see any, quote, large misalignments of the U.S. financial system.
The chairman also said that the Fed would continue its policies that have been keeping interest rates down near record lows.
Chris Arnold, NPR News. Transcript provided by NPR, Copyright National Public Radio.
