Here's a story about the future of interest rates and the economy ...Tuesday, March 21, 2006Bloomberg NewsThe small difference between short- and long-term interest rates isn’t a sign of an economic slowdown, and the increasing consumer mortgage debt isn’t a serious problem, says Federal Reserve Chairman Ben S. Bernanke."Wealth has grown," Bernanke told the Economic Club of New York Monday. "Families have made a lot of progress in restructuring their liabilities."If consumers continue to pay off credit card debt and house prices moderate, consumers could increase their saving, he says.Low long-term rates complicate the Fed's job of managing the economy because they blunt the effects of increases in the Fed's benchmark short-term rate.To the extent that the difference between short- and long-term rates is narrowing because investors are willing to accept less risk because of stable inflation, "the implications for future economic activity are positive rather than negative," Bernanke says.Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula
