The Federal Reserve isn't known for making feisty speeches. The independent US central bank prefers to do its work quietly -- in Washington, but miles away from the hyperpolitical tenor of Beltway debates.
But in yesterday's speech to the European Central Bank in Germany, Fed Chair Ben Bernanke delivered what might be his most pointed speech yet. He hit back against critics of his new $600 billion stimulus, a new wave of US Treasury purchases he hopes will raise inflation and lower interest rates. (Read our FLASHCARD explainer on the Fed's plan.) He unleashed barely veiled attacks against undervalued currencies in China and other emerging markets. And, for the first time, he called on US lawmakers to pass another round of stimulus.
In Bernanke's own words:
The Federal Reserve is nonpartisan and does not make recommendations regarding specific tax and spending programs. However, in general terms, a fiscal program that combines near-term measures to enhance growth with strong, confidence-inducing steps to reduce longer-term structural deficits would be an important complement to the policies of the Federal Reserve.
In my words: The recovery will not live on quantitative easing alone. We need Congress to step up and pass another round of tax cuts or spending increases to give states and families firepower in the cool recovery.