Chairman of the Federal Reserve Ben Bernanke testified before the House Financial Services Committee on Wednesday morning. The 10-second takeaway, a near facsimile of Tuesday’s hearing before the Senate Banking Committee, was that Bernanke remains a champion of quantitative easing. Rolling with the blows dealt by those who disagree with his policies (there are many), Bernanke dug a trench around the idea that the benefits of the Fed’s policy outweigh the risks.
The hearings were broken down into two parts: testimony and a questions and answers portion. Panel testimony at the beginning of the hearings was consciously kept brief under what seemed to be a consensus that the real meat was in Bernanke’s testimony and the Q&A session. As mandated, Bernanke delivered the same testimony before both panels.
The whole thing is worth a read, but it doesn’t really contain any surprises or new insight. In it, Bernanke describes the U.S. economy as expanding at a “moderate if somewhat uneven pace.” In his perspective, flat-to-negative fourth-quarter GDP growth should be interpreted as an effectively seasonal fluctuation, and should not be taken to indicate the beginning of another recessionary period. The fourth-quarter pause in economic activity punctuated about 3 percent annual growth in 2012.
Bernanke’s take is of the of glass-half-full variety, describing the labor market as “improving gradually” though “generally weak.” Some early focus was given to the dual mandate of the Federal Reserve — which states that the FOMC will try to maximize employment and maintain moderate long-term interest rates — and the central bank’s decision to link its policy to these metrics…