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It's not often that Federal Reserve Chairman Ben Bernanke plays second fiddle when he makes his twice-yearly trip to Capitol Hill to outline his current outlook on monetary policy and the economy.
But with all eyes on the extensive proposals put forth on July 13 by U.S. Treasury Secretary Henry Paulson and the Fed to restore confidence in Fannie Mae (FNM) and Freddie Mac (FRE), the struggling mortgage giants at the heart of the escalating credit crunch, much of the focus when the Senate Banking Committee met for Bernanke's testimony on July 15 came in the second act.
Bernanke testified for 90 minutes on everything from the risks facing the economy (he warned of "significant downside risks to the outlook for growth" even as the threat of inflation is growing) to his views on oil speculation (he doesn't think speculative activity or manipulation is a big cause of the recent runup in oil prices).
Stabilizing Move, or a Bailout?
