Federal Reserve Chairman Ben Bernanke will be testifying on the impact of an economic stimulus package before the House of Representatives' Budget Committee on Monday morning. The Democratic House is currently considering delivering a second stimulus package, reportedly estimated at around $150 billion, but potentially much larger.
In the chairman's latest update of the economy, Bernanke said inflation pressures had eased but that there would be a "marked slowdown" in spending, investments and employment. He said the Fed would use all tools necessary to combat the slowing economy, but it will still take time to unfreeze credit markets.
"Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away," Bernanke said at the Economic Club of New York on Oct. 15.
Whether Bernanke believes a fiscal stimulus package is appropriate won't be revealed until his testimony before the House.
On Friday, House majority leader Nancy Pelosi sent a letter to John Boehner, the House minority leader, encouraging bipartisan action on a plan for economic recovery:
"Congress must address these challenges in a bipartisan manner and without delay... That is why I hope you will encourage Republican Members to actively participate in the series of hearings relevant committees are holding in the coming weeks as we craft initiatives to make our economy stronger and more competitive in a global marketplace."
Bernanke will testify at 10 a.m. EDT.
By Patrick McGee and edited by Nancy Girgis
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