Bernanke Signals Asset Sales May Have Bigger Exit Role
Ben Bernanke
Federal Reserve Chairman Ben Bernanke signaled Thursday that sales of the central bank's holdings in mortgage-backed securities may play a more prominent role in the withdrawal of monetary stimulus than he indicated last month.
 "I anticipate that at some point we will in fact have a gradual sales process " Bernanke said Thursday in testimony to the House Financial Services Committee. In prepared remarks  he avoided repeating a February statement that the Fed won't sell any securities "at least until after policy tightening has gotten under way." Instead  he said Thursday the tool is one way of "applying monetary restraint."
 "We would like to get back to an all-Treasury portfolio within a reasonable amount of time " Bernanke said in response to a question from Rep. Jeb Hensarling  R-Texas. The balance sheet should eventually be reduced to less than $1 trillion  Bernanke told Rep. Ron Paul  R-Texas  who advocates abolishing the Fed.
 Raising the interest rate paid on funds deposited by banks at the Fed  as well as so-called reverse repurchase agreements that temporarily drain cash from the banking system  will still be among the main tools for tightening credit  Bernanke said.
 "The FOMC is not comfortable with holding all of these securities until they mature  as some would be 30 years  and we want to move more quickly than that back to the pre-crisis balance sheet " Bernanke said. The Fed wouldn't sell assets in a "really weak economy " he said.
 At the same time  Bernanke didn't say when the Fed would begin executing its strategy. He said the U.S. economy still needs low interest rates and that the central bank will be ready to tighten credit "at the appropriate time."
 "The economy continues to require the support of accommodative monetary policies " Bernanke said in prepared testimony  repeating parts of a statement to the panel from last month.
 Thursday's hearing  originally scheduled for Feb. 10  was postponed because of a snowstorm. The Fed went ahead and released Bernanke's prepared testimony that day  in part to lay the groundwork for a planned increase in the interest rate the central bank charges for direct loans to banks.
 Responding to questions  Bernanke said the "unemployment situation is very weak " and the housing market is "still quite weak."
[TGT] signaled Thursday that sales of the central bank's holdings in mortgage-backed securities may play a more prominent role in the withdrawal of monetary stimulus than [TGT] indicated last month.
 "I anticipate that at some point we will in fact have a gradual sales process " [TGT] said Thursday in testimony to the House Financial Services Committee. In prepared remarks  [TGT] avoided repeating a February statement that the Fed won't sell any securities "at least until after policy tightening has gotten under way." Instead  [TGT] said Thursday the tool is one way of "applying monetary restraint."
 "We would like to get back to an all-Treasury portfolio within a reasonable amount of time " [TGT] said in response to a question from Rep. Jeb Hensarling  R-Texas. The balance sheet should eventually be reduced to less than $1 trillion  [TGT] told Rep. Ron Paul  R-Texas  who advocates abolishing the Fed.
 Raising the interest rate paid on funds deposited by banks at the Fed  as well as so-called reverse repurchase agreements that temporarily drain cash from the banking system  will still be among the main tools for tightening credit  [TGT] said.
 "The FOMC is not comfortable with holding all of these securities until they mature  as some would be 30 years  and we want to move more quickly than that back to the pre-crisis balance sheet " [TGT] said. The Fed wouldn't sell assets in a "really weak economy " [TGT] said.
 At the same time  [TGT] didn't say when the Fed would begin executing its strategy. [TGT] said the U.S. economy still needs low interest rates and that the central bank will be ready to tighten credit "at the appropriate time."
 "The economy continues to require the support of accommodative monetary policies " [TGT] said in prepared testimony  repeating parts of a statement to the panel from last month.
 Thursday's hearing  originally scheduled for Feb. 10  was postponed because of a snowstorm. The Fed went ahead and released [TGT]'s prepared testimony that day  in part to lay the groundwork for a planned increase in the interest rate the central bank charges for direct loans to banks.
 Responding to questions  [TGT] said the "unemployment situation is very weak " and the housing market is "still quite weak."