HOUSTON (FTMDaily.com) — The bogus "economic recovery" that the current administration, the U.S. Treasury, and the Federal Reserve have been touting for the last 18 months is now, according to Fed Chairman Ben Bernanke "close to faltering."
The Fed chief made the comments while speaking before the congressional Joint Economic Committee on Tuesday. Bernanke added that the central bank is prepared to step in with more intervention and warned lawmakers not to make any big spending cuts while the economy remains weak.
"We need to make sure that the recovery continues and doesn't drop back and that the unemployment rate continues to fall downward," Bernanke said on Tuesday. He also admitted that the economy is not growing as quickly as the Fed had expected and that poor job growth is the biggest factor depressing consumer confidence.
The Dow Jones industrial average came off its Tuesday morning drop of more than 200 points to only 64 points at midday, after Bernanke suggested that the Fed could employ additional stimulus action in the near future.
Alternatively, the Fed could increase its purchase of government securities, which would bring its holdings to record levels. Another option is a reduction in the rate of interest the Fed pays to banks for their excess reserves.
Bernanke also said in his speech that there is a limit to what the Fed's interest rate policies could accomplish. The three primary areas that Congress should focus on are "long-term unemployment, budget deficits, and the depressed housing market."
The jobs report for September will be released by the government on Friday. All eyes will be anxiously watching.