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Bernanke Low credit access stifling economy
WASHINGTON (7/14/11)--Limited credit access is one of several “headwinds” that the U.S. economy continues to face as the nation works to recover from the recent economic crisis, Federal Reserve Chairman Ben Bernanke said in Wednesday’s Semiannual Monetary Policy Report to Congress. Slowed consumer spending, low home values, and reduced government spending also continue to hinder recovery, he added. Bernanke spoke before the House Financial Services Committee. He is scheduled to deliver remarks before the Senate Banking Committee today. Bernanke said that recent weak economic performance, which was demonstrated by an uptick in the unemployment rate and lower than expected job growth, could be blamed on “several factors that are likely to be temporary.” These factors include the impact of high energy and food prices on consumer spending and the effects of Japan’s recent earthquake on auto manufacturing. Officials continue to predict that the nation’s gross domestic product could increase by 2.9% in 2011 and 3.7% in 2012. Both of these increases would be better than what has occurred so far in 2012, Bernanke said. The Fed chairman said that his agency may again move to stimulate the economy if economic conditions do not improve. “The possibility remains that the recent weakness may prove more persistent than expected and that deflationary risks might reemerge, implying additional policy support,” he said. The Credit Union National Association advocates an increase in credit union member business lending authority as a way America's credit unions can increase access to capital for small businesses and help them create jobs—with no cost to taxpayers. Lifting the credit union member business lending cap to 27.5% of total assets, as proposed in separate Senate and House bills, could inject an estimated $13 billion in funds into the economy and create more than 140,000 new jobs, CUNA has estimated. For Bernanke’s full report, use the resource link.
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