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Bernanke Downbeat on Economy

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  • Description

    Nomura senior U.S. economist Ellen Zentner weighs in on Bernanke's testimony on monetary policy.

  • Duration 4:01
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Its market.

-- the Federal Reserve Chairman did not give us even the slightest bit of a hints at when we'll see more monetary easing but.

He was a whole lot more pessimistic about the health of our economic recovery joining me now -- that there -- US.

No more Allen -- -- -- back on the show so we another Federal Reserve Chairman doesn't normally discuss monetary policy at these congressional -- yet.

Were you able to glean -- being.

About how Bernanke plans to deal with -- stalling economy.

Yes actually I feel like we were able to glean something from his testimony.

This was a semiannual report on monetary policy that what he doesn't do.

Isn't typically give.

Hence a -- out where monetary policy is going especially for the next meeting -- so and so while we didn't get any overt.

Over hints of how the committee is leaning on some further policy easing or how the chairman himself is leaning on further policy easing.

As you said he painted a more pessimistic overview of the economy.

And even downplayed his previous comments -- on that weakness had been due to.

It measurement issues in the data.

Warm weather the warmer winter weather that had pulled activity forward whereas before he was really downplaying the weakness of the data by using those temporary factors is an example.

He really.

Made a point of getting out there and saying that only -- explains a very small part of the weakness in the data so clearly a subtle shift there and so we still in our view believe that more monetary policy easing is coming.

But it's not going to be we still at this very next meeting I don't think -- a strong temporary census.

On the committing yes we think that it would come in September we think.

The weaker data and the deceleration we see an economy warrant more monetary easing -- we don't.

Think the consensus on the committee is quite there yet for ago at the due July 31 August personally -- everybody's rating in the forecast for economic growth.

The quote from Bernanke -- economic growth in the US are increasing risks increasing what's your take now have you -- in your own.

GDP forecasts for about -- They yeah I tell you -- you you won't find many private forecasters out there to have -- revised downward their growth forecasts.

I'm not only earlier this year -- we revise downward on expectations of how big coming US fiscal cliff would impact the economy later this year.

But are also our own tracking model for second quarter GDP growth.

Implies that were only growing in the low one so around one point 2% or so that's dangerously close to that stalled rate than economists believe is.

Is the danger point for the US economy and certainly the Fed sees it that way as well I -- it.

Get your take on one other issue as you know Bernanke couldn't even guarantee -- current Libor rate as being actor yes -- like ten trillion dollars in loans right that are.

Those rates are dependent -- -- made on that Libor -- so what's your take on a -- if it economic implications of this Libor scandal.

Well that is certainly it it and raises eyebrows once again toward the financial industry we just seem to get hammered left and right.

At issues like this that bring up the credibility of the industry and puts further strains.

On our industry with which is so fundamentally important to the US economy we knew that this was going to be big issue in the testimony today.

For Bernanke to handle I think he did it did a good job of of handling the issue and I'm sure we'll get further questions on live -- board tomorrow when he meets.

The house saying and for -- gives these same prepared remarks at that time but having it just underscores that the problems with the financial industry.

And the credibility there are ongoing.

-- -- thanks so much.

Thank you so sorry -- that the Fed chief did a good job guaranteeing live.

Or I don't know if he really can -- it actually that's a great job -- -- Our confidence that the Libor rate currently is accurate I thought it was a little bit ironic when he said that he thinks rate manipulation is -- because there are of course a lot of people out there think.

Expect that ten point that it Billy -- long time that I got a lot of notes about that when that happened from.

The US Europe right on the ball anyway Marisa.

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