Feb 10, 2010 10:29 AM by Associated Press
Federal Reserve Chairman Ben Bernanke is outlining the central bank's plan for reeling in stimulus money once the economic recovery is more firmly rooted.
In prepared remarks to a House committee, Bernanke says the Fed will likely start tightening credit by boosting the interest rate it pays banks on money they leave at the central bank. Consumers and companies would then have to pay more to borrow.
Bernanke indicates the Fed is still months away from raising rates or draining most of the stimulus money it injected to aid the financial system. He says the recovery still needs support from record-low interest rates. He uses his remarks to explain how the Fed will try to pull back stimulus money without tipping the economy back into recession.
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