Bernanke to Testify on Fed Exit Strategy on Feb. 10

This article discusses that on February 10 Bernanke and his colleagues plan to testify before the House Financial Services Committee about Fed's exit strategy to end the economic stimulus. Fed upgraded its economic outlook for near future, and decided to stop the liquidity and lending programs which sum up in a $1.25 trillion of stimulus to buy mortgage backed securities. Some of the tools that Fed may use to unwind stimulus would be reverse repurchase agreements, selling the assets on its balance sheet, and paying interest rate on excess reserves. Althought there is a great pressure from Congress for such an early action, without planning an exit strategy, the fear of expected inflation might cause uncerainty that might lead to bad consequences.