Bernanke: Fed Has No Plans to Monetize Debt
Federal Reserve Chairman Ben Bernanke today told Congress that the central bank has no plans to monetize the sharply rising deficits of the United States and defended the Fed's program to purchase Treasuries. He told Congress of the need for Washington to control spending and set appropriate tax levels, in consultation with the American people, to achieve 'fiscal sustainability' in the long term. By that he meant a situation where the ratio of government debt service to the size of the economy is stable or declining. By Robert Stowe England June 3, 2009 In his appearance before Congress today Federal Reserve Board Chairman Ben Bernanke responded directly to mounting worries about sharply rising budget deficits in the United States, amid growing concern among major international investors in U.S. Treasuries, from China to Saudi Arabia, that the Fed might monetize those deficits. If the Fed were to monetize the debt issued to cover most of the rising deficits, it could lead t...