Bernanke predicts economy's comeback
Federal Reserve Chairman Ben Bernanke at a hearing on Capitol Hill
TEXT OF INTERVIEW
BILL RADKE: Fed Chairman Ben Bernanke is on Capitol Hill right now for the first of two hearings. Twice a year the Fed Chair testifies on monetary policy and tells us all about our economy. This round is shaping up to be a little more heated than usual.
Marketplace's Amy Scott's been watching the action and joins us live from New York. Hi, Amy.
AMY SCOTT: Hi, Bill.
RADKE: What's going on so far?
SCOTT: Well, Bernanke says the downturn appears to be abating -- that word we've been hearing a lot of lately.
SCOTT: He expects to see a gradual economic recovery next year, picking up in 2011. But he also says unemployment is expected to remain a problem for the next couple of years.
BEN BERNANKE: You know, I want to be clear that we have a very long haul here. Because even though . . . if the economy begins to turn up in terms of production, unemployment is going to stay high for quite a while. And so it's not going to feel like a really strong economy.
SCOTT: Bernanke also talked about inflation. Because of the weak economy, he doesn't expect prices to rise much for at least the next few years. But he did talk about the Fed's so-called exit strategy, if it does become a problem. As you know, the Fed has been pumping money into the system to help prop up the economy, and that can lead to inflation down the road. So Bernanke was very clear that he doesn't intend to let that happen.
RADKE: Based on Bernanke's recent encounters with Congress, this hearing is not expected to be smooth sailing for him, right?
SCOTT: That's right. He's been under attack for the Fed's role in the takeover of Merrill-Lynch by Bank of America, and perhaps for going too far in bailing out some financial institutions. Congressman Ron Paul has also introduced a bill to audit the Fed. So there was a bit of a heated exchange over that idea. Bernanke says the bill is a threat to the Fed's independence.
Also, his term expires in January, and it's assumed that he'd like to hold onto his job. So, there's perhaps more at stake than usual.
RADKE: Amy Scott is our New York bureau chief. Amy, thank you.
SCOTT: Thank you.