Bush has “total confidence” in Bernanke: adviser
WASHINGTON (Reuters) – President George W. Bush has “total
confidence” in Federal Reserve Chairman Ben Bernanke, a top
White House adviser said on Thursday, adding that the new Fed
chief will not allow inflation to pick up.
“Inflation is a concern to all of us,” White House economic
adviser Allan Hubbard said in an interview with CNBC.
“But we’re very, very confident, the president is very,
very confident in Ben Bernanke and the members of the Federal
Reserve Board. They have made it very clear they are going to
be very hawkish in keeping inflation under control. They are
also going to make certain that the economy is going to grow.”
“There is no question that Bernanke is not going to allow
inflation to increase,” Hubbard, the director of the National
Economic Council, said.
The U.S. central bank has raised U.S. interest rates 16
straight times, taking benchmark overnight borrowing costs to 5
percent, in an effort to head off inflation.
But, spurred by surprisingly strong readings on core
prices, financial markets have been jittery about the inflation
outlook and are uncertain whether the Fed has done enough.
Some analysts have said market nerves reflect concerns
about the inflation-fighting resolve of Bernanke, who took
office on February 1. U.S. Treasury Secretary John Snow used a
speech before the Bond Market Association on Friday to also
voice confidence in Bernanke, saying the Fed knew price
stability was “their No. 1 priority.”
In the interview with CNBC, Hubbard refused to be drawn out
on whether higher interest rates were needed to combat
inflation. “The Fed knows what’s best for the economy and the
president has total confidence in Ben Bernanke and the Fed.”
Hubbard said the Bush administration felt very good about
the state of the economy and called a government report
released on Thursday that showed the U.S. economy grew at an
upwardly revised 5.3 percent annual rate in the first quarter
– the swiftest pace in 2-1/2 years — “very significant.”
He also said a low level of initial claims for state
unemployment aid “suggest that the unemployment rate is going
to continue to decline.”