Bernanke’s How-To on Rate Increase Lacks a When

This article focuses on Ben Bernanke, chairman of the Federal Reserve's plan to scale back the amount of aid it has given to offset the economy. It explains that "the Federal Reserve has eased borrowing by lowering short-term interest rates to nearly zero and built up a $2.2 trillion balance sheet by scooping up assets like mortgage-backed securities and even vast sums of Treasury Bonds and notes". Although Bernanke did provide "how, as the recovery proceeds, to gradually shrink the balance sheet, which along with a vast array of assets also includes $1.1 trillion that banks are holding with the Fed," he has yet to produce a timetable for these policies. As well as raising the interest rate on reserves, Mr. Bernanke discussed three other options for draining reserves. The first involves reverse repurchase agreements, the second involves term deposits similar to certificates of deposit, a third option involves redeeming or selling securities. All these strategies carry some risk, this may be why Bernanke seems to want to avoid the question of when these programs will end.