U.S. News: Bernanke Backs Plan In Senate
Federal Reserve Chairman Ben Bernanke defended the central bank's plan to buy government bonds during a private gathering with U.S. senators, responding to several days of attacks from Republicans who say the Fed is causing inflation and weakening the dollar.</br></br>The Fed chairman denied the U.S. was manipulating the currency through its plan to purchase $600 billion of U.S. Treasury bonds and pointed to research by the Federal Reserve Bank of Boston which estimated the program could create 700,000 to one million jobs over two years.</br></br>Sen. Richard Shelby, an Alabama Republican, said he "wasn't persuaded" and noted that "even some Fed officials have doubts" about the central bank program. GOP lawmakers said in a letter to Mr. Bernanke released Wednesday that the Fed's move "introduces significant uncertainty regarding the future strength of the dollar and could result. . .in hard-to-control, long-term inflation."</br></br>In a sign of divisions within conservative political circles about the Fed, Tom Donohue, head of the U.S. Chamber of Commerce, a frequent ally of Republicans, came out in support of Mr. Bernanke. Mr. Donohue said Mr. Bernanke had "acted in a very important way" to help economic growth and warned lawmakers "not to louse that up."</br></br>Evan Bayh (D., Ind.) said the Fed chief told lawmakers the central bank was "absolutely committed" to stable inflation.