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Ben Bernanke faces questions from Congress on economy – US politics live Ben Bernanke faces questions from Congress on economy – US politics live
(40 minutes later)
11.52am: And that's it – Bernanke's testimony is over and the market seems to have perked up slightly, since the Fed chairman stayed neutral on the subject of further policy action.
On CNBC, Steve Liesman draws everyone's attention to the first footnote in Bernanke's written testimony, which suggests the Fed may be slightly sceptical about the validity of the weak job creation numbers last month:
In particular, the unusually warm weather this past winter may have brought forward some hiring in sectors such as construction where activity normally is subdued during the coldest months; thus, some of the slower pace of job gains this spring may have represented a payback for that earlier hiring. In addition, the estimated seasonal factors for some economic indicators may have been influenced by the timing of the steepest part of the decline in activity during the 2008-09 winter months; if so, the seasonal adjustment process may have resulted in an overstatement of economic activity this past winter and the understatement of activity in other months.
11.48am: On the path for interest rates, Ben Bernanke says he expects they will "normalize over time" but isn't saying anything about timing other than to repeat the FOMC's 2014 date.
11.47am: Bill Gross of Pimco:
Gross: Bernanke/ Yellen tagteam opens door for more QE.60/40 probability.
Not sure you need a tag team to open a door. Mixed metaphortastic.
11.42am: If you had "Volcker rule" in the Bernanke buzzword drinking game, then you are late for your AA meeting.
As it happens, Bernanke says that the Volcker rule would have given the Fed more information on the situation at JP Morgan over its recent multiple billion dollar losses.
11.35am: What are the key lessons we can learn from Europe, wonders Democratic congressperson Talking McPoints.
"There are some important differences," says Bernanke, such as that single currency lack of fiscal union thing.
11.30am: Via my colleague Dominc Rushe in New York: the early reviews of Ben Bernanke's performance are in and they are all a bit flat. "There's obviously some disappointment that Ben hasn't hinted at more imminent action," says Dominic.
David Semmens, senior US economist, Standard Chartered:
Disappointing some in the market FRB Chairman Bernanke stops well short of signaling that QE3 is already a done deal at the June 20 meeting.
Michael Moran, chief economist, Daiwa Securities:
Bernanke didn't reveal anything new in his prepared remarks. He was general and vague about what the Fed might do with monetary policy. He reiterated the Fed was willing to do more, if needed, but offered no clues as to whether additional support was needed at this time.
Tom Porcelli, chief US economist, RBC Capital Markets:
The headlines from Bernanke are fairly bland, with the meat of his discussion to come from the Q&A. People were maybe expecting something more explicit in his speech, but any details will come from the Q&A.
11.20am: "Do you sleep well at night?" asks a Republican committee member. No, really. "No, I walk the streets fighting crime," replies Bernanke. He doesn't really. "I generally sleep pretty well but I have a lot to do during the day and I need to be well rested," is what he actually said.
11.15am: Senator Bernie Sanders of Vermont wants Bernanke to endorse his legislation that strips the guaranteed seats for bankers on Federal Reserve regional boards.11.15am: Senator Bernie Sanders of Vermont wants Bernanke to endorse his legislation that strips the guaranteed seats for bankers on Federal Reserve regional boards.
In particular Sanders has a go at JP Morgan's Jamie Dimon and his seat on the New York Fed. Like a "fox guarding the hen house," Sanders grumbles.In particular Sanders has a go at JP Morgan's Jamie Dimon and his seat on the New York Fed. Like a "fox guarding the hen house," Sanders grumbles.
Bernanke says that it's all up to Congress. Bernanke more open to Sanders' suggestion of throwing bankers off Fed boards than I would have thought
Bernanke says that it's all up to Congress but says nothing to defend the status quo regarding the foxes.
11.05am: Now the Tea Party godfather, Senator Jim DeMint, is speaking, and coming out with some bizarre yet standard Tea Party talking points.11.05am: Now the Tea Party godfather, Senator Jim DeMint, is speaking, and coming out with some bizarre yet standard Tea Party talking points.
"I'm sure you have a totally different take on that," says DeMint to Bernanke after reeling off some off-beam stuff about the recession being caused by regulation (it's hard to tell) and, er, low interest rates. Or something."I'm sure you have a totally different take on that," says DeMint to Bernanke after reeling off some off-beam stuff about the recession being caused by regulation (it's hard to tell) and, er, low interest rates. Or something.
"I would question whether or not low interest rates are enabling fiscal deficits," responds Ben Bernanke, pointing out that the deficit is large no matter what the level of interest rates."I would question whether or not low interest rates are enabling fiscal deficits," responds Ben Bernanke, pointing out that the deficit is large no matter what the level of interest rates.
DeMint is just grandstanding, although he does ask a semi-sensible question about Bernanke's contradiction between wanting some fiscal stimulus and worrying about debt levels. Bernanke patiently reminds him not to confuse short term and long term problems and their solutions.DeMint is just grandstanding, although he does ask a semi-sensible question about Bernanke's contradiction between wanting some fiscal stimulus and worrying about debt levels. Bernanke patiently reminds him not to confuse short term and long term problems and their solutions.
10.59am: In case you were wondering:10.59am: In case you were wondering:
US is not Greece: BernankeUS is not Greece: Bernanke
Not that the Republicans will take any notice.Not that the Republicans will take any notice.
10.53am: Lots of talk about the housing market, which Ben Bernanke has some intriguing views upon, as my colleague Dominic Rushe notes.10.53am: Lots of talk about the housing market, which Ben Bernanke has some intriguing views upon, as my colleague Dominic Rushe notes.
It's interesting that Bernanke thinks the housing market "looks to be stabilising". The still terrible housing market has been a huge drag on this recovery and one that for some reason politicians don't seem to keen to talk about that often.It's interesting that Bernanke thinks the housing market "looks to be stabilising". The still terrible housing market has been a huge drag on this recovery and one that for some reason politicians don't seem to keen to talk about that often.
The last Case-Shiller survey of the US housing market was depressing stuff. All three of the analyst's measures were at new post-crisis lows at the end of the first quarter.The last Case-Shiller survey of the US housing market was depressing stuff. All three of the analyst's measures were at new post-crisis lows at the end of the first quarter.
Home prices in Atlanta, Chicago, Las Vegas, New York and Portland all reached new lows in March. You can read about it here.Home prices in Atlanta, Chicago, Las Vegas, New York and Portland all reached new lows in March. You can read about it here.
Case-Shiller said a "floor" may have been reached, Ben clearly thinks that may be the case too.Case-Shiller said a "floor" may have been reached, Ben clearly thinks that may be the case too.
In the meantime it's also worth pulling out this noteworthy quote from Bernanke's earlier prepared remarks:In the meantime it's also worth pulling out this noteworthy quote from Bernanke's earlier prepared remarks:
A severe tightening of fiscal policy at the beginning of next year that is built into current law – the so-called fiscal cliff – would, if allowed to occur, pose a significant threat to the recovery.A severe tightening of fiscal policy at the beginning of next year that is built into current law – the so-called fiscal cliff – would, if allowed to occur, pose a significant threat to the recovery.
That's some tough talk right there. he's referring to the automatic cuts built into the budgetary suicide-pact that Congress agreed on.That's some tough talk right there. he's referring to the automatic cuts built into the budgetary suicide-pact that Congress agreed on.
Now a really long and possibly irrelevant question about interest rate-swaps.Now a really long and possibly irrelevant question about interest rate-swaps.
If you had "Basle 3" in the Bernanke buzzword drinking game this morning, then you are possibly an alcoholic.If you had "Basle 3" in the Bernanke buzzword drinking game this morning, then you are possibly an alcoholic.
10.46am: This just in: the Romney campaign and the Republican National Committee announce that they jointly raised $77m in May, a big lead in the money stakes over the $60m that Obama and the DNC raised in the same period.10.46am: This just in: the Romney campaign and the Republican National Committee announce that they jointly raised $77m in May, a big lead in the money stakes over the $60m that Obama and the DNC raised in the same period.
The Romney campaign and RNC also have $107m cash on hand.The Romney campaign and RNC also have $107m cash on hand.
10.43am: The stock market doesn't like Chairman Bernanke's refusal to hint at further policy action, with the indices all ticking down.10.43am: The stock market doesn't like Chairman Bernanke's refusal to hint at further policy action, with the indices all ticking down.
Oh and thanks for taking an ad break right in the middle there Bloomberg TV and CBNC.Oh and thanks for taking an ad break right in the middle there Bloomberg TV and CBNC.
10.34am: In response to Bernanke's plea for Congress to "take some of the burden", Kevin Brady – the vice chairman of the committee – confesses that he wants Bernanke to publicly repudiate any further quantitative easing – to jolt Congress into action.10.34am: In response to Bernanke's plea for Congress to "take some of the burden", Kevin Brady – the vice chairman of the committee – confesses that he wants Bernanke to publicly repudiate any further quantitative easing – to jolt Congress into action.
Brady's a Republican from Texas, so let's assume he isn't a raging Keynesian.Brady's a Republican from Texas, so let's assume he isn't a raging Keynesian.
10.31am: Asked in more detail about what the Fed could do to achieve further stimulus. Ben Bernanke replies, eventually:10.31am: Asked in more detail about what the Fed could do to achieve further stimulus. Ben Bernanke replies, eventually:
I recognise that rates are quite low so that is clearly a consideration. We do have tools that do let us have further accomodation in the economy and do offer some support.I recognise that rates are quite low so that is clearly a consideration. We do have tools that do let us have further accomodation in the economy and do offer some support.
"Monetary policy is not a panacea," Bernanke goes on, and remarks that "it would be much better" to have broad based policy – meaning that Congress should get off it's ass. That's not quite how Bernanke puts it howevere: "I'd be much more comfortable if Congress would take some of the burden off us.""Monetary policy is not a panacea," Bernanke goes on, and remarks that "it would be much better" to have broad based policy – meaning that Congress should get off it's ass. That's not quite how Bernanke puts it howevere: "I'd be much more comfortable if Congress would take some of the burden off us."
10.27am: Question time for Ben Bernanke, and Senator Joe Lieberman unloads all the big questions straight off the bat: China's interest rate move, the ECB's lack of action, and what is the Fed going to do about the economy in the wake of the dismal employment figures.10.27am: Question time for Ben Bernanke, and Senator Joe Lieberman unloads all the big questions straight off the bat: China's interest rate move, the ECB's lack of action, and what is the Fed going to do about the economy in the wake of the dismal employment figures.
Is that all?Is that all?
Bernanke answers directly – to a degree – on the Fed's next action, and offers a small hint that something may well be done at the FOMC's next meeting towards the end of this month. But he says that changes in short-term interest rates aren't an option (given that they are effectively zero).Bernanke answers directly – to a degree – on the Fed's next action, and offers a small hint that something may well be done at the FOMC's next meeting towards the end of this month. But he says that changes in short-term interest rates aren't an option (given that they are effectively zero).
10.22am: Dominc Rushe gives his thoughts on recent comments by Bernanke's deputy, Janet Yellen:10.22am: Dominc Rushe gives his thoughts on recent comments by Bernanke's deputy, Janet Yellen:
Yellen warned that "headwinds" - the Fed's most overused phrase these days - were holding back the US recovery, including the Euro woes. "I am convinced that scope remains for the FOMC (The Fed's action committee) to provide further policy accommodation either through its forward guidance or through additional balance-sheet actions," she said.Yellen warned that "headwinds" - the Fed's most overused phrase these days - were holding back the US recovery, including the Euro woes. "I am convinced that scope remains for the FOMC (The Fed's action committee) to provide further policy accommodation either through its forward guidance or through additional balance-sheet actions," she said.
Her comments add weight to a Wall Street Journal article earlier this week that said the Fed was considering further action to prop up the US's fragile recovery.Her comments add weight to a Wall Street Journal article earlier this week that said the Fed was considering further action to prop up the US's fragile recovery.
10.18am: Ben Bernanake's a little slow to get started, but we have his prepared testimony – the full text is here.10.18am: Ben Bernanake's a little slow to get started, but we have his prepared testimony – the full text is here.
One key quote that suggests further monetary easing isn't about to be launched in the absence of something dramatic:One key quote that suggests further monetary easing isn't about to be launched in the absence of something dramatic:
The situation in Europe poses significant risks to the US financial system and economy and must be monitored closely. As always, the Federal Reserve remains prepared to take action as needed to protect the US financial system and economy in the event that financial stresses escalate.The situation in Europe poses significant risks to the US financial system and economy and must be monitored closely. As always, the Federal Reserve remains prepared to take action as needed to protect the US financial system and economy in the event that financial stresses escalate.
Stating the bleeding obvious there – but no bones for the teenage scribblers who have been frothing at the mouth in recent weeks about the Fed's lack of action.Stating the bleeding obvious there – but no bones for the teenage scribblers who have been frothing at the mouth in recent weeks about the Fed's lack of action.
Bernanke delivered a warning for his audience to act more aggressively on fiscal responsibility:Bernanke delivered a warning for his audience to act more aggressively on fiscal responsibility:
At best, rapidly rising levels of debt will lead to reduced rates of capital formation, slower economic growth, and increased foreign indebtedness. At worst, they will provoke a fiscal crisis that could have severe consequences for the economy.At best, rapidly rising levels of debt will lead to reduced rates of capital formation, slower economic growth, and increased foreign indebtedness. At worst, they will provoke a fiscal crisis that could have severe consequences for the economy.
10am: The Guardian's Dominc Rushe sets the scene for Ben Bernanke's testimony to Congress this morning:10am: The Guardian's Dominc Rushe sets the scene for Ben Bernanke's testimony to Congress this morning:
Bernanke is speaking after a couple of good days on the US stock exchanges. The Dow Jones industrial average ended up 286.84 points, or 2.4%, at 12414.79 yesterday – it's second up day in a row adding to the largest two-day
points and percentage gain since December 21, 2011.		Bernanke is speaking after a couple of good days on the US stock exchanges. The Dow Jones industrial average ended up 286.84 points, or 2.4%, at 12414.79 yesterday – it's second up day in a row adding to the largest two-day
points and percentage gain since December 21, 2011.
Today is off to a good start too with the Dow up over 100 points so far. Now lets see what impact Ben has.Today is off to a good start too with the Dow up over 100 points so far. Now lets see what impact Ben has.
9.45am: Ben Bernanke's testimony to Congress is the political highlight of the day, as the Federal reserve chairman is grilled by politicians over the state of the US economy.9.45am: Ben Bernanke's testimony to Congress is the political highlight of the day, as the Federal reserve chairman is grilled by politicians over the state of the US economy.
That's coming up shortly. In the meantime, here's Ryan Devereaux with a summary of developments:That's coming up shortly. In the meantime, here's Ryan Devereaux with a summary of developments:
• Federal Reserve chairman Ben Bernanke will pay a visit to Capitol Hill today to answer questions on the nation's economy. He is expected to be questioned about the economic crisis in Europe, and how that will impact on the US economy. In its late April forecasts the Fed brightened its predictions for 2012, anticipating more growth and lower unemployment than it had three months earlier. But since then job growth has slumped and stock prices have fallen.• Federal Reserve chairman Ben Bernanke will pay a visit to Capitol Hill today to answer questions on the nation's economy. He is expected to be questioned about the economic crisis in Europe, and how that will impact on the US economy. In its late April forecasts the Fed brightened its predictions for 2012, anticipating more growth and lower unemployment than it had three months earlier. But since then job growth has slumped and stock prices have fallen.
• There are signs of improvement in the nation's battered labour market. For the first time since April the number of Americans lining up for jobless benefits last week declined. According to the labour department, state unemployment benefits dropped 12,000 to a seasonally adjusted 377,000. Claims had risen for four consecutive weeks prior to last week, while last month's jobless rate was 8.2%, well above the long-term historical average.• There are signs of improvement in the nation's battered labour market. For the first time since April the number of Americans lining up for jobless benefits last week declined. According to the labour department, state unemployment benefits dropped 12,000 to a seasonally adjusted 377,000. Claims had risen for four consecutive weeks prior to last week, while last month's jobless rate was 8.2%, well above the long-term historical average.
• President Barack Obama and the Democratic party raised $60m in May, outpacing their April fundraising total of $43.6m. The sum includes cash collected after Obama announced his support for same sex marriage. The president took to Twitter yesterday to say that the average donation he received was $54.94.• President Barack Obama and the Democratic party raised $60m in May, outpacing their April fundraising total of $43.6m. The sum includes cash collected after Obama announced his support for same sex marriage. The president took to Twitter yesterday to say that the average donation he received was $54.94.
98% of the donations the campaign received in May were less than $250, and the average donation was $54.94.98% of the donations the campaign received in May were less than $250, and the average donation was $54.94.
So far the president and the Democratic party have collected $450m for their 2012 re-election campaign. Mitt Romney's campaign has yet to post its totals from last month.So far the president and the Democratic party have collected $450m for their 2012 re-election campaign. Mitt Romney's campaign has yet to post its totals from last month.
• A new CBS News/New York Times poll finds more than two-thirds of Americans want to see the Supreme Court overturn some or all of president Obama's signature healthcare law. Forty-one percent of respondents said they want to see the law overturned altogether, 27% wanted the justices to overturn the individual mandate and just 24% said they hoped the court "would keep the entire healthcare law in place."• A new CBS News/New York Times poll finds more than two-thirds of Americans want to see the Supreme Court overturn some or all of president Obama's signature healthcare law. Forty-one percent of respondents said they want to see the law overturned altogether, 27% wanted the justices to overturn the individual mandate and just 24% said they hoped the court "would keep the entire healthcare law in place."
• Texas congressman Ron Paul has acknowledged that he will not have enough delegates to win the Republican presidential nomination. In a statement to his supporters last night Paul said: "When it is all said and done, we will likely have as many as 500 supporters as delegates on the Convention floor. That is just over 20%! And while this total is not enough to win the nomination, it puts us in a tremendous position to grow our movement and shape the future of the GOP!" With a highly organized base of deeply committed backers, Paul has managed to rack up a number of delegates in states he did not win.• Texas congressman Ron Paul has acknowledged that he will not have enough delegates to win the Republican presidential nomination. In a statement to his supporters last night Paul said: "When it is all said and done, we will likely have as many as 500 supporters as delegates on the Convention floor. That is just over 20%! And while this total is not enough to win the nomination, it puts us in a tremendous position to grow our movement and shape the future of the GOP!" With a highly organized base of deeply committed backers, Paul has managed to rack up a number of delegates in states he did not win.