EVEN so, the Fed remains busy behind the scenes and is counting on two massive programs to help spur consumer lending and stir some revival in the depressed housing market.
In one of these, the central bank has begun buying up to US$600 billion worth of debt and mortgage securities backed by government-related mortgage finance providers, a programme that has helped drive down mortgage costs.
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WASHINGTON - FEDERAL Reserve Chairman Ben Bernanke this week will offer assurance that help is on the way for the troubled US economy and may offer clues on additional steps that could be taken to halt an ever-steepening dive.
With US stocks closing at 6-1/2-year lows on Friday on fears big banks will be nationalised, Mr Bernanke will likely be pressed on government plans to clean up the financial sector when he delivers the Fed's semiannual monetary policy report to Congress in two days of testimony on Tuesday and Wednesday.
'He's going to talk about the Fed still having tools in its tool kit and that it will do whatever it can to get the economy going,' said Joseph LaVorgna, an economist for Deutsche Bank Securities in New York. After bringing its main policy lever, the overnight interbank lending rate, as low as it practically can go in December, the Fed has largely ceded the spotlight to the new administration of President Barack Obama. Mr Obama has already signed into law an almost US$800 billion (S$1.2 trillion) government stimulus package and his team has rolled out bank and housing rescue plans. -- THOMSON REUTERS
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