In a surprise development this morning, Ben Bernanke has been named TIME magazine’s 2009 Person of the Year.
Calling him “the most powerful nerd on the planet”, the magazine credits the Fed Chief for saving us from the abyss, leading us to a period of weak recovery “rather than a catastrophic depression.”
That’s their story and they are sticking to it.
Meanwhile, as expect, the newly minted person of the year/smartest guy in the room decided to keep overnight rates unchanged…
From Bloomberg by Craig Torres entitled: Fed Keeps ‘Extended Period’ Pledge, Sees Rebound
“The Federal Reserve repeated its pledge to keep interest rates “exceptionally low” for “an extended period” and said the economy is strengthening.
“Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit,” the Federal Open Market Committee said in a statement today after meeting in Washington. “Businesses are still cutting back on fixed investment” and “remain reluctant to add to payrolls.” Deterioration in the labor market is “abating.”
Chairman Ben S. Bernanke, who faces a confirmation vote for a second term by the Senate Banking Committee tomorrow, is battling what he calls “significant headwinds” of declining credit and continuing job losses. While the economy has returned to growth after the deepest recession since the 1930s, most economists surveyed by Bloomberg News predict the unemployment rate will exceed 10 percent through June. Consumer spending is still below its level of two years ago.
Officials kept their benchmark overnight lending rate between banks in range of zero and 0.25 percent, where it has been for a year. Policy makers restated that low interest rates are contingent on ‘low rates of resource utilization, subdued inflation trends, and stable inflation expectations.’
It looks like the PPT has won again. One of their own has been crowned king.
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