Don't expect any help from us, Ben Bernanke tells eurozone leaders
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Ben Bernanke, the chairman of the Federal Reserve, sent a message of "you're on your own" to European leaders yesterday, telling them there were no policy tools or technical steps the US central bank could take to help ease the pressures in the eurozone.
Instead, in testimony to domestic lawmakers on Capitol Hill, he said the Fed would monitor American banks to make sure any sudden worsening of the euro crisis did not infect the US financial system. And he promised the Fed stood ready to prop up demand in the US if Europe pushes the wider global economy into recession.
"The risks have waxed and waned. The crisis has been going on for more than two years and there have been periods of greater and lesser intensity," he said. "Certainly it is at a point where it is important for European leaders to take additional steps to contain the problem."
US banks are stronger than they were going into the subprime mortgage meltdown of 2007-09, but the situation in Europe "poses significant risks to the US financial system", he warned – and there is an economic effect, too.
"The crisis in Europe has affected the US economy by acting as a drag on our exports, weighing on business and consumer confidence, and pressuring US financial markets and institutions," he said in testimony before the Joint Economic Committee.
Traders were paying close attention to his testimony to see if he would hint at new monetary policy measures to stimulate the US economy, after the most recent economic data suggested the stuttering recovery was slowing once more.
In the wake of a disappointing figure for US job creation last month, and an uptick in the unemployment rate to 8.2 per cent, some other members of the Fed's interest rate-setting committee had raised expectations that it could extend the central bank's policy of quantitative easing.
Under QE, the Fed has printed dollars to buy US government debt to drive rates down, and it has most recently focused purchases on long-dated bonds so as to better affect the rates businesses and homebuyers pay.
Although Mr Bernanke promised that no options were off the table, he cast doubt on whether further action would be necessary.
He said the disappointing jobs figures may not reflect a slowdown, so much as just reflect that employment stayed stronger than usual through the mild winter.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments