Bernanke Believes Recession Ending; Rates Going Up

Federal Reserve Chief Ben Bernanke appeared on 60 Minutes and said he believed the recession would end later in 2009. He also said he believed that rates would have to rise to forestall inflation.

Federal Reserve Chief Ben Bernanke appeared on 60 Minutes and said he believed the recession would end later in 2009.   He stated that there would not be any more big bank failures and that the first priority was stabilizing the financial system.  Although the general public may be angry at the bailouts, he said that "The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis."

Bernanke also conceded that much of the bailout is not being funded by taxpayer money, but is "more akin to printing money than it is borrowing."  As the economy warms up, Bernanke said the Fed will have to raise rates in order to prevent inflation.

Look for rates on Treasuries and other deposit products (savings accounts, cds) to head up if economic data begins to improve. 

Sol Nasisi
Sol Nasisi: Sol Nasisi is the co-founder and a past president of BestCashCow, an online resource for comprehensive bank rate information. In this capacity, he closely followed rate trends for all savings-related and loan products and the impact of rate fluctuations on the economy. He specifically focused on how rates impact consumers' ability to borrow and save. He also has authored a wee

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Comments

  • jbn14

    March 17, 2009

    He certainly did an excellent job on 60 Minutes, but it is going to take a little more than a pep talk from Ben to get us out of this mess. What is more interesting is what he said about the AIG mess - he took action against collateral to avoid a systematic collapse, an action that apparently he couldn't take with Lehman.

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