Bernanke speaks to mortgages and finance at FDIC symposium
Federal Reserve Chairman Ben Bernanke speaks during a House Financial Services Committee hearing on Capitol Hill in Washington, D.C.
TEXT OF INTERVIEW
STEVE CHIOTAKIS: Federal Reserve Chairman Ben Bernanke is speaking this morning at an FDIC symposium, looking at mortgages and finance. The Fed Chairman says some mortgage holders may be in for rough ride for some time to come.
BEN BERNANKE: With housing markets still weak, high levels or mortgage distress may well persist for some time to come.
Chairman Bernanke is speaking on the day we got a new report from the National Association for Business Economics. Their survey out today says economists have become much more cautious about growth going forward.
Hugh Johnson is with Hugh Johnson Advisers. He's with us live from New York this morning. Hi Hugh.
HUGH JOHNSON: Hi, how are you?
CHIOTAKIS: Doing well. Let's talk about the housing first and what the Fed Chairman is talking about this morning at the FDIC conference. What are the markets looking to hear about the housing market and what can the Fed to about it?
JOHNSON: There wasn't much expectation for what Chairman Bernanke was going to say about housing this morning. He did allude to housing or refer to housing. What the Federal Reserve can do about it that we know right now is keep long term interest rates in general, but mortgage rates in particular, at a fairly low level and hope that at a low level that'll start to stimulate some buying of homes. Right now he is quite right in saying that housing is very very anemic and they can certainly help by keeping long rates low and they do plan to do that.
CHIOTAKIS: Anemic housing. Alright, so let's talk about this report from the NABE about the Nation's economy. Why is the recovery, up until now anyway, been so stagnant?
JOHNSON: Well, I think it's been stagnant because we've had a lot to work our way through. I think number one at the top of the list is firms have not been confident that we're going to have a good recovery and as a result they've been very very reluctant to hire. This report is a little more upbeat than I think has been mentioned. It's starting to talk about an improvement in demand, an improvement in profits, prospects for employments are getting a little bit better, they're not great, the economy is just limping along. But basically the report says even though the economy is just limping along, things are starting to get a little bit better. So that should be I think taken as clearly good news.
CHIOTAKIS: We're going to wrap it up there. Hugh Johnson from Hugh Johnson Advisers in New York. Thank you sir.
JOHNSON: You're welcome.