Federal Reserve Chairman Ben Bernanke goes to Capitol Hill Wednesday and Thursday to present the Fed's twice-yearly report on the state of the economy and its forecast for growth. He will face lawmakers anxious for answers on how the country can avoid a double-dip recession.
Federal Reserve Chairman Ben Bernanke goes to Capitol Hill Wednesday and Thursday to present the Fed's twice-yearly report on the state of the economy and its forecast for growth.
He will face lawmakers anxious for answers on how the country can avoid a double-dip recession.
Bernanake has made clear in previous appearances that the Fed believes recovery will be slow and that unemployment is likely to stay stubbornly high.
With the unemployment rate currently at 9.5 percent, home sales and consumer confidence sliding again, and banks and businesses reluctant to put their money to work, the fears of a double-dip recession are rising.
Democrats on the Senate Banking Committee and House Financial Services Committee are expected to look to Bernanke for support of further stimulus efforts. Republicans will urge him to back deficit reduction.
Bernanke will likely discuss the various options the Fed has to support the economy, and restate the Fed's intent to keep official interest rate already near zero for and extended period.
Senators Prod Fed On Credit Card Rates
Meanwhile, two lawmakers in Congress are prodding the Fed to provide more protection so that credit card users don't get socked by exorbitant interest rates when they fall behind on their payments.
"Credit card companies can still double or triple the interest rate when a consumer falls two months behind on payments" despite new Fed rules, Sens. Charles Schumer of New York and Tom Harkin of Iowa, said Tuesday. The two Democrats made their case in a letter Tuesday to Bernanke.
The lawmakers want the Fed to alter the rules, which take effect Aug. 22, to prevent big rate hikes under such circumstances. If the Fed doesn't act, Schumer and Harkin said they'll seek legislation to compel the Fed to do so. Both lawmakers have championed measures in Congress to provide consumers with stronger protections.
The Fed had no immediate comment on lawmakers' request.
Congress directed the Fed to implement the new rules in a sweeping law enacted last year.
In writing the rules, the Fed interpreted the law as covering fees and charges -- not interest rates.
The Fed rules, among other things, bar credit card companies from charging a penalty fee of more than $25 for paying a bill late.
They prohibit credit card companies from charging penalty fees that are higher than the dollar amount associated with the customer's violation. They also ban so-called "inactivity" fees when customers don't use the account to make new purchases.
With reporting from NPR's John Ydstie and The Associated Press. Copyright 2010 National Public Radio. To see more, visit http://www.npr.org/.