Bernanke: start work now to curb budget deficit
Ben Bernanke
Federal Reserve Chairman Ben Bernanke is urging Congress and the Obama administration to start plotting a strategy to curb record-high U.S. budget deficits. Failing to do so could eventually erode investor confidence and endanger the economy's prospects for long-term health  he said.
 Bernanke said that such forceful government intervention to fight the worst financial crisis since the 1930s and lift the U.S. out of recession was "necessary and appropriate" even though it worsened the nation's budget deficit.
 Bernanke acknowledged that Congress and the administration face "formidable near-term challenges" that must be addressed as they take steps to stabilize the financial system  reduce home foreclosures and spur banks to lend more freely. The success of these efforts will be crucial to turning the economy around.
 Bernanke cautioned: "Unless we demonstrate a strong commitment to fiscal sustainability in the longer term  we will have neither financial stability nor healthy economic growth."
 With the recovery likely to be subdued  inflation will remain low  Bernanke predicted. Some worry that the Fed's aggressive efforts -- including buying billions worth of government bonds -- to revive the economy could sow the seeds of inflation.
 "I respectfully disagree with her views " Bernanke said  adding that he is "comfortable" with the Fed's actions.
 Bernanke didn't offer specific recommendations on what steps they should take to bring the deficits under control.
 Observing the recent rise in rates on mortgages and longer-term Treasury securities  Bernanke said the increases appear to reflect concerns about large federal deficits as well as greater optimism about the economic outlook. That's a reversal in a pattern seen in the depths of the recession of investors flocking to safe havens.
 Bernanke cited improvements in credit markets  but again warned that a relapse could hurt the economy's recovery prospects. He also said that banks are meeting with some success in raising capital in private markets  suggesting greater investor confidence in the banking system.
 Bernanke repeated his belief that the recession will end this year  and that the economy will start growing again later this year. But he again warned that the pace of the recovery will be slow and that unemployment -- now at a quarter-century peak of 8.9 percent -- will rise even after the recession ends.
[TGT] is urging Congress and the Obama administration to start plotting a strategy to curb record-high U.S. budget deficits. Failing to do so could eventually erode investor confidence and endanger the economy's prospects for long-term health  [TGT] said.
 [TGT] said that such forceful government intervention to fight the worst financial crisis since the 1930s and lift the U.S. out of recession was "necessary and appropriate" even though it worsened the nation's budget deficit.
 [TGT] acknowledged that Congress and the administration face "formidable near-term challenges" that must be addressed as they take steps to stabilize the financial system  reduce home foreclosures and spur banks to lend more freely. The success of these efforts will be crucial to turning the economy around.
 [TGT] cautioned: "Unless we demonstrate a strong commitment to fiscal sustainability in the longer term  we will have neither financial stability nor healthy economic growth."
 With the recovery likely to be subdued  inflation will remain low  [TGT] predicted. Some worry that the Fed's aggressive efforts -- including buying billions worth of government bonds -- to revive the economy could sow the seeds of inflation.
 "I respectfully disagree with her views [TGT] said  adding that [TGT] is "comfortable" with the Fed's actions.
 [TGT] didn't offer specific recommendations on what steps they should take to bring the deficits under control.
 Observing the recent rise in rates on mortgages and longer-term Treasury securities  [TGT] said the increases appear to reflect concerns about large federal deficits as well as greater optimism about the economic outlook. That's a reversal in a pattern seen in the depths of the recession of investors flocking to safe havens.
 [TGT] cited improvements in credit markets  but again warned that a relapse could hurt the economy's recovery prospects. [TGT] also said that banks are meeting with some success in raising capital in private markets  suggesting greater investor confidence in the banking system.
 [TGT] repeated [TGT] belief that the recession will end this year  and that the economy will start growing again later this year. But [TGT] again warned that the pace of the recovery will be slow and that unemployment -- now at a quarter-century peak of 8.9 percent -- will rise even after the recession ends.