ABC’s Dan Arnall (@abcmoneyguy ) reports:
Federal Reserve Chairman Ben Bernanke avoids direct comment on the current government fiscal debt crisis in remarks prepared for testimony today on Capitol Hill.
Instead he will focus on the Fed’s assessment of the economy’s health and outlining how the Fed’s monetary policies have succeeded in keeping the U.S. out of a deflationary spiral at a hearing before the House Financial Services Committee today.
While the Chairman’s remarks are avoid the topic that is at the center of the capital’s current dialog, it is almost certain members of the House of Representatives will focus their hours-long question and answer period on government borrowing and the debt ceiling.
Some more highlights from his prepared remarks:
- "In part, the recent weaker-than-expected economic performance appears to have been the result of several factors that are likely to be temporary. Notably, the run-up in prices of energy, especially gasoline, and food has reduced consumer purchasing power. In addition, the supply chain disruptions that occurred following the earthquake in Japan caused U.S. motor vehicle producers to sharply curtail assemblies and limited the availability of some models.”
- “Long-term unemployment imposes severe economic hardships on the unemployed and their families, and, by leading to an erosion of skills of those without work, it both impairs their lifetime employment prospects and reduces the productive potential of our economy as a whole.”
- “Much of the slowdown in aggregate demand this year has been centered in the household sector, and the ability and willingness of consumers to spend will be an important determinant of the pace of the recovery in coming quarters. Real disposable personal income over the first five months of 2011 was boosted by the reduction in payroll taxes, but those gains were largely offset by higher prices for gasoline and other commodities. Households report that they have little confidence in the durability of the recovery and about their own income prospects.”