Tester puts Fed Chairman in the hot seat
Senator presses Bernanke on the impact of record prices
(WASHINGTON, D.C.) – Senator Jon Tester today put the nation's top economist in the hot seat, grilling him about rising prices and their impact on ordinary Montanans.
Federal Reserve Chairman Ben Bernanke testified today before Tester and his colleagues on the Senate Banking Committee. The Fed is responsible for setting money policy and steering the national economy.
Bernanke released his semiannual Monetary Policy Report to Congress this week. The report covers a broad range of topics such as the nation's economic outlook, unemployment and spending trends.
Tester, a Big Sandy farmer, used the opportunity to ask Bernanke about the impact of record prices of commodities such as grains, corn and soybeans. Tester offered a rare perspective of rural Americans who have to balance the rising prices of commodities, which benefit agricultural states, with the pressures of rising everyday costs like groceries and gas.
"I'm no economist. I'm a farmer," Tester said after the hearing. "I admit it's nice to see the price of wheat reach record highs. But I also know that this has major impacts on everyone in the long term."
High prices in a sluggish economy could lead to inflation. Tester specifically wants to know how inflation might impact prices of commodities and food prices, and what the Fed plans to do to head off the threat.
Bernanke answered by saying grocery prices are directly related to commodity prices. He added groceries will get cheaper when commodity prices go down, but not right away. Bernanke said that will happen after an undeterminable 'lag period.'
Tester said he is committed to working with Bernanke and doing what he can on the Banking Committee to put the brakes on the national economic downturn. But he also noted that local economists predict Montana won't be hit as hard as other states.
Still, Tester isn't taking any chances.
"I go home to Montana every weekend and talk with folks who have real concerns about their family's finances," Tester said. "Those concerns are getting louder, and I'm making sure the folks on the Banking Committee hear all of them."