by Collin Barr
In this article Ben Bernanke explains the current economic state and the moves the fed plans to take. According to Bernanke, the economy is recovering, but we are a long way away for where we need to be. Unemployment is a major issue, and he doesn't expect it to be solved quickly but over a gradual time table. Bank lending still seems to be weak, so the Fed expects to keep short-term interest rates near 0%. He also wonders whether the still weak property markets will continue to damper consumers and the economy.
It’s interesting that this article mentions that the commercial real estate market is struggling. In class we talked about the commercial real estate market, but its not discussed very much in the news. Perhaps the media doesn’t wish to focus on another area that may cause trouble for the economy, but as Bernanke says it could lead to problems because communities and banks hold many commercial real estate loans.
ReplyDeleteI think a very important part mentioned in this article is keeping interest rates near 0 for awhile longer. This will encourage investment sense investment and interest are negatively related. The thing the Fed needs to remember though is what happened in 2001 when they left interest rates too low for too long. (housing collapse)
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