Bernanke stands firm on low interest rates
How does Federal Reserve Chairman Ben Bernanke know the economy will need low interest rates through 2014? Here, Federal Reserve Board Chairman Ben Bernanke testifies during a hearing before the Senate Budget Committee Feb. 7, 2012 on Capitol Hill in Washington, D.C.
Kai Ryssdal: Ben Bernake made another of his semi-regular schleps up to Capital Hill today. There was much interest among members of Congress about how the economy's doing, and when interest rates might finally begin to rise.
The Fed chairman said the economy won't be healthy enough to do that until 2014. How does he know? Here's Heidi Moore.
Heidi Moore: Spoiler alert: he doesn't. He's guessing.
Milton Ezrati: It's important to realize that the Federal Reserve cannot see the future any better than anybody else.
That's Milton Ezrati, the chief economist for Lord Abbett. He concedes it's not easy to be an economic oracle these days. There are a lot of ways to measure the economy's positive trajectory: manufacturing, consumer sentiment, GDP -- they're all looking up. But a lot of houses are empty and millions of people are still out of work.
Alan Levenson: It is not a robust recovery.
Alan Levenson is the chief economist for T. Rowe Price.
Levenson: We have the deepest recession since WWII and we have basically the weakest recovery since then.
Bernanke's job to keep prices low and employment high. He says he doesn't favor one over the other, but obviously one of them tends to attract more attention.
Levenson: Since inflation is at a satisfactory rate - not too high, not too low - he can focus on full employment. So yes, that's his priority.
Unemployment is at 8.3 percent, and Bernanke wants to knock off another few points. That's unlikely to happen before -- yes, you guessed it -- 2014. Ezrati says Bernanke isn't the only one trying to figure out what's happening.
Ezrati: We're all guessing, and there is never enough data, that is true.
That doesn't keep us from treating Bernanke like an oracle anyway.
In New York, I'm Heidi Moore for Marketplace.