Bernanke warns Congress of increased economic risks

While economists and politicians alike were surprised by an unexpected (although modest) period of economic growth during the start of 2012, meager job creation and fluctuating unemployment applications have slowed this improvement considerably in recent weeks. Today, many financial authorities are unsure of how the American economy will look as the year progresses.

Chairman of the Federal Reserve Ben Bernanke came before Congress on June 7 to speak about his organization’s position on the matter, according to CBS News MoneyWatch. Bernanke warned that the U.S. economic state is at an increased level of risk, which could possibly necessitate intervention from the Federal Reserve should the situation become significantly worse.

Fortune reports that much of Bernanke’s concern stems from the federal debt ceiling – an issue that was at the forefront of national attention last summer. Congress agreed to raise the debt limit through tax increases and budget cuts, which Bernanke worries could push the U.S. into another recession. However, the Federal Reserve has indicated that it will not be changing its current strategy to brace for this situation – instead waiting to see what develops in the coming months.

However, some financial experts feel that Bernanke could be exaggerating these fears. The news source points to Chad Stone of the Center on Budget and Policy Priorities, who feels that careful policy making and negotiating from Congress can avert another crisis.

 

Tags: budget cuts, Congress, economic growth, Federal Reserve, recession, tax increases, unemployment

Category: Employers