Ben Bernanke was expected to tell U.S. lawmakers Tuesday the Federal Reserve is poised to embrace new stimulus measures but won't say when, economists said.
Bernanke's message to the Senate Banking Committee at 10 a.m. EDT is expected to be that the Fed is "prepared to take further easing action as appropriate, but will give no indication that such action is imminent," economists at Barclays Investment Bank said in a research note ahead of the Fed chairman's semi-annual report to Congress.
Bernanke is to testify before the House Banking Committee Wednesday.
Easing, or quantitative easing, is a major bond-buying program intended to stimulate the national economy.
Minutes of the Fed's June meeting, released last week, indicated "a few" of the 12 officials who vote on Fed policy thought quantitative easing and other stimulus measures "likely would be necessary to promote satisfactory growth." Several others said they would consider such steps only if economic conditions deteriorated, the minutes indicated.
The Fed announced after its June 19-20 meeting it would continue until year's end an effort to reduce business and consumer borrowing costs by rearranging its portfolio.
Bernanke was also expected to be asked, when he testifies before the House committee Wednesday, about allegations large banks manipulated a key interest rate, lawmakers said.
House Banking Committee Chairman Spencer Bachus, R-Ala., and the panel's top Democrat, Rep. Barney Frank of Massachusetts, said they would question Bernanke about the potential effect of such manipulation on consumers and the financial system.
The lawmakers Monday announced a bipartisan probe into the manipulation of London interbank offered rates, joining investigations by regulators. The Libor rate is the average interest rate at which large international banks can borrow from each other.
The benchmark is used to help determine the borrowing costs for $750 trillion worth of financial products, including mortgages, credit cards and student loans.
At least 10 banks are under scrutiny, including Barclays PLC, HSBC Holdings PLC, JPMorgan Chase & Co. and Citigroup Inc.
Barclays agreed last month to pay $450 million to settle accusations by U.S. and British authorities it manipulated Libor rates.
Questions have been raised by U.S. and British regulators and lawmakers about how regulators in both countries could have failed to stop the practice, despite evidence the Bank of England and the Federal Reserve Bank of New York knew about it.
Most Popular Stories
- NSA Defends Global Cellphone Tracking Legality
- Top Websites for U.S. Hispanics
- Ad Counts Rise in 2013 for Hispanic Magazines
- Networks Vie for U.S. Hispanic TV Viewers
- Saab Gets Back into the Game; U.S. Auto Sales Soar
- Apple Activates Customer-Tracking iBeacon
- Dell Offers Undisclosed Number of Employee Buyouts
- A Biography of Jonathan Ive, Apple's Creative Chief
- 2013 Tech Gift Guide: iPad Mini Still Hot; Chromecast a Great Low-Cost Option
- Authorities Close to Deal with JPMorgan Chase over Madoff Response