Rescue of Bear Stearns Bernanke argue very special position in the market.

<P> Acknowledged the U.S. economy is going through a very difficult period for Fed Chairman Ben Bernanke in the U.S. Congress Joint Economic Committee yesterday held a hearing admitted that the U.S. economy is facing serious difficulties. .He also echoed the Fed's rescue of Bear Stearns, said the status of Bear Stearns decided it could not go bankrupt. ."Real GDP growth does not seem much, or in the first half of 2008, the economy may be a slight negative growth." Bernanke said at the hearing, "Obviously, the U.S. economy is going through a very difficult period." .Bernanke's view, relative to the Federal Open Market Committee (FOMC) at the end of January of the forecast, the expected short-term economic outlook is becoming more pessimistic. .Although he still believes the second half, the economy will be improved, will be over next year's economic growth rate of potential growth, but the current down economy is still facing great risk. .Inflation is another issue of concern to the Fed. .Bernanke said that the current high inflation is due to sharply higher crude oil and agricultural products, while core inflation has begun to fall, and is expected to continue to decline in the second half. .However, he pointed out that the upside risks to inflation can not be avoided. .This is largely due to increased public expectations of inflation. .Bernanke said that monetary policy makers will be a central concern. .For employment, Bernanke that the current workforce reduction was mainly due to the shrinkage of the construction industry and related industries, in business services and retail trade, employment is still growing, the overall unemployment rate is still low. .But Bernanke warned that the slowdown in economic growth as a whole, the unemployment rate will likely rise in the coming months. .In addition to the economic outlook, the market is very concerned about the Bernanke Fed to rescue Bear Stearns by JP Morgan to explain the incident. .Bernanke's statement yesterday that the important market position of Bear Stearns, so the market can not sustain its bankruptcy. ."In the March 13, Bear Stearns informed the Fed and other U.S. government departments, their mobility has seen a dramatic deterioration of the situation." Bernanke said Bear Stearns said that if the Government fails to provide funds, then the company's first .two days will file for bankruptcy. .According to http://finance. Hearing, Bernanke acknowledged that the incident was difficult for the Fed. ."In general, the market decide which company to survive, which company closed down, but it should be like this." Bernanke said, "but (Bear Stearns) issue is beyond the scope of a company. Our financial .system is very complex and closely linked to Bear Stearns in many markets have a deep involvement. fragility in the financial system, when the sudden collapse of Bear Stearns would bring great confusion to the market and hit the market .confidence. "In order to prevent the emergence of adverse effects, the Fed, after discussions with the U.S. Treasury decided to Bear Stearns by JP Morgan Chase for assistance, and then announced the acquisition of Bear Stearns, JP Morgan Chase. .However, Bernanke did not think that this is the government's investment will pay for the irresponsible. ."A more liquid market will improve the efficiency of monetary policy, which in turn contributes to the achievement of the goals Congress set for us, that is, to maximize the employment and price stability." Bernanke said. .</ P>.