Fed Chief Defends Performance

With rumors circulating that his job is on the line, the chairman of the Federal Reserve, Ben Bernanke, said that the economic downturn is slowing, though the labor market "remains weak." The Fed chief did not paint a rosy picture, however, saying that the housing market remains weak due to falling home prices, unemployment and tight credit, all of which undermine "the recent stabilization in household spending." Still, Bernanke said the necessary tools are at his disposal to prevent a sudden rise in inflation—a common concern among those with stakes in American debt, like the Chinese government. "We are confident that we have the tools to raise interest rates when that becomes necessary to achieve our objectives of maximum employment and price stability," Bernanke said in prepared comments laden with economic jargon to the House Committee on Financial Services.