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U.S. Federal Reserve chairman Bernanke's defense of QE III

06/15/2011

Bernanke's defense of the Federal Reserve's QE I, QE II, and QE III. focusses on keeping interest rates down because higher interest rates would increase borrowing costs of the government. In the eurozone capital markets are setting interest rates for Germany, France, Italy and Spain. The Fed is using its monetary policies to set rates low to keep borrowing costs on U.S. debt down. It also keeps economic growth from dropping to a point where it reduces government revenues and worsens the deficit. This buys time for Congress and a newly elected administration to come together on a plan for the deficit and generating growth.

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