Federal Reserve Chairman Ben Bernanke in the U.S. Senate Banking Committee issued a semi-annual monetary policy testimony. Investor sentiment in the financial markets remain worried about the context of increasingly severe, Bernanke’s speech this time was the release of additional certainty to the market given the important task of the signal.

Now it seems that Bernanke is bound to rule out the U.S. economy is “second bottom,” the possibility, but will emphasize the recovery is still fragile situation; in the future Fed policy, Bernanke will be committed to: the institution has done good preparation, in the economic recovery may be substantial deterioration, the ability through the introduction of new stimulus measures to ensure the sustainability of U.S. economic recovery. Before the onset of extreme conditions, urged the U.S. domestic consumption and economic activity will continue to be the most important task the Federal Reserve.

Little hope of raising interest rates during the year

Recently, the U.S. consumer spending and corporate activity level of economic activity continue to fall, resulting in the first quarter of the U.S. economy by the state failed to show recovery in the subsequent renewed. Central University of Finance and Economics and Management College of China, Professor Bo Ruobo that the United States of consumer and business economic activity, has not yet played it in Ciqianduoci economic played critical “recovery led Li Liang” role. Earlier this month 15, the Fed had expected this year, U.S. gross domestic product (GDP) will grow from 3 to 3.5 percent, lower than its April forecast of 3.2% to 3.7%; while Goldman Sachs is one week to Annual GDP growth in the United States is expected from 3% to 2%.

In this case, Bernanke would continue to fuel consumption as its future as a major objective of monetary policy. In view of this, the U.S. media that the reality has made the possibility of the Fed raising interest rates during the year greatly reduced; While Bernanke will avoid conduct a positive attitude, but the U.S. Federal Reserve interest rate increase more likely time should be in 2011 or 2012 .

Fed likely to continue to maintain the current low interest rate unchanged judge, means that the U.S. economy in the field of credit cards, mortgage loans, adjustable rate mortgages and other types of consumer credit interest rates will continue to remain in the decades the lowest level. However, Bernanke also stressed the recovery of part of the liquidity risk of reducing the importance of the U.S. economy.

20, the Fed agreed to the Ministry of Finance to the Federal Reserve’s periodic asset-backed securities lending instruments (TALF) credit guarantees provided by the scale of 20 billion U.S. dollars from the previous to 43 million. TALF Scheme became operational in March 2009, at the end of June 2010 due. Federal Reserve plans to market through the injection of 200 billion U.S. dollars, to increase the liquidity of the financial system, of which 200 billion from the Treasury Asset Relief Program (TARP).

According to TALF plan, the New York Fed to high-level asset-backed securities and commercial mortgage-backed securities to provide loans to investors. The Fed hopes to activate the related asset securitization market, and increase credit availability and support economic activity. U.S. media believes that the Fed still needs to stimulate the real economy in the case of recovery of part of the liquidity, reflecting its long-term U.S. economic prospects to consider. Although the size is not large, but the move showed that the Fed’s vigilance for such a situation, that the economic recovery situation improves, financial institutions will hold a large number of liquidity after the release into the real economy, causing the situation to inflation appears.

Also, Bernanke also will emphasize the promotion of employment for the importance of U.S. economic recovery. U.S. Labor Department released the latest data showed U.S. unemployment rate was 9.5% in June, although somewhat lower than previous months, but still 14 months in a row over 9%; and according to the Federal Reserve is expected within this year the nation’s unemployment rate will be difficult to fall below the horizontal line.

Trip to the House of Representatives easily unspeakable

Continuous on promoting consumption, promoting employment, anti-inflation views on such key issues and make things difficult for senators to accept the two parties after the nearly 57-year-old Bernanke also need non-stop in the United States Eastern time at 9:30 on the 22nd, “is speeding up” to the House of Representatives Financial Services Commission, which this hearing was not the same Bernanke makes it easy.

U.S. media projected, Bernanke will need to find ways to make the House of Representatives who are convinced that “their new responsibilities given to the Fed’s supervision is not given an learn from our mistakes, or in the future may make improper interference on the financial sector and institutional requirements “; other words, the Bernanke Fed is likely to confirm the financial system for their own regulatory power has been expanded.

In addition, the Bernanke Fed may also vice chairman of the new posts and supervisory duties related to express their views. At present, the vice chairman of the Federal Reserve has not just stepped down from the post of Fed Governor Donald Kohn will also be fully retired on September 1; And if Obama had been nominated by U.S. President San Francisco Fed President Janet Cohen Yellen will inherit the job at the Fed, then the Council will ensure the normal operation of the institution. By Federal Reserve regulations, the IAEA Board of Governors at least have five members to operate, while Cohen’s retirement will make the current members only 4.

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