Fed Chief Takes Heat From Republicans

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http://www.nytimes.com/2012/02/03/business/economy/fed-chief-focuses-anew-on-us-debt.html?_r=2&hp

WASHINGTON — Congressional Republicans criticized the Federal Reserve on Thursday for working to reduce unemployment and revive the housing market rather than maintaining a single-minded focus on inflation.

The Fed’s chairman, Ben S. Bernanke, was sharply questioned by members of a House committee about the Fed’s announcement last week that it plans to hold short-term interest rates near zero until late 2014, a measure that the Fed described as necessary to support a faster pace of economic recovery.

“I think this policy runs the great risk of fueling asset bubbles, destabilizing prices and eventually eroding the value of the dollar,” said Representative Paul Ryan, the Wisconsin Republican who chairs the House Committee on the Budget. “The prospect of all three is adding to uncertainty and holding our economy back.”

Mr. Bernanke was calm and careful in his responses, but he did not back down. He told the committee that the economy, the housing market in particular, would need help for years to come from the Fed and Congress.

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1. new CBO study predicts sluggishly high unemployment

From another NYT article earlier: "...the unemployment rate, which was 8.5 percent in December, will climb to 8.9 percent in the last quarter of this year, which includes Election Day, and will rise to 9.2 percent in the final quarter of 2013."