Bernanke Tries to Reassure Lawmakers on Economy

BusinessBernanke Tries to Reassure Lawmakers on EconomyBernanke Tries to Reassure Lawmakers on EconomyThe Associated PressFederal Reserve Chairman Ben Bernanke tried to assure lawmakers Wednesday that the government is prepared to take all necessary steps to prevent the credit market troubles that started last year from further weakening the economy.(July 16)[Notes:ANCHOR VOICE] For a second day in a row, Federal Reserve Chairman Ben Bernanke testified before Congress on the problems facing the economy. Bernanke appeared amid a backdrop of fading confidence in the U.S. financial system, but stressed that policymakers are working to find solutions to the issues at hand.[Notes:SOT: Bernanke:]I TEND TO HAVE A VERY SHORT-TERM FOCUS AND OBVIOUSLY WE HAVE A LOT OF CHALLENGES AHEAD. WE WILL WORK OUR WAY THROUGH THIS FINANCIAL STORM AND THE CYCLICAL MOVEMENTS AND HELP THE ECONOMY RETURN TO GOOD GROWTHThose challenges are immense: ongoing credit troubles, high energy and food prices, and a severe housing slump. In response to controversy over the financial lifeline the government extended to mortgage giants Fannie Mae and Freddie Mac, Bernanke said keeping them in their current form is said the best solution going forward. With the economic problems expected to continue well into next year, the Fed is faced with finding the right course of action.It can't afford to lower interest rates again because that will aggravate inflation. On the other hand, boosting rates to fend off higher prices would deal a setback to the fragile economy and the already crippled housing market. ___ ___, The Associated Press.(****END****)