WASHINGTON – Federal Reserve Chairman Ben S. Bernanke, in his first clash with the Democrat-controlled House, signaled that the central bank may need to raise interest rates, Bloomberg News said.
But he also won praise for being clearer in his responses than predecessor Alan Greenspan. “At least you are speaking in English,” said Rep. Melvin Watt, D-N.C.
Bernanke sparred with House Financial Services Committee Chairman Barney Frank, D-Mass., saying “If inflation becomes higher for some reason, then the Federal Reserve would have to respond,” in response to Frank’s questioning Thursday.
Frank called it “troubling” that Bernanke would advocate raising rates while forecasting only moderate growth. The Fed last week pared its forecast for economic growth this year to 2.5 percent, and predicted 2.75 percent to 3 percent growth in 2008.
Committee members also questioned the Fed chairman on the state of U.S. health care, job creation and affordable-housing mortgages. And Frank questioned “this policy of entirely free capital to move wherever it finds the best return.”
