America

Will Fed Chairman Bernanke Be Right This Time?

Federal Reserve Chairman Ben Bernanke during his congressional testimony today. i i

hide captionFederal Reserve Chairman Ben Bernanke during his congressional testimony today.

Chip Somodevilla/Getty Images
Federal Reserve Chairman Ben Bernanke during his congressional testimony today.

Federal Reserve Chairman Ben Bernanke during his congressional testimony today.

Chip Somodevilla/Getty Images

No one ever said economic forecasting was easy:

On the last day of February 2007, Federal Reserve Chairman Ben Bernanke told Congress that "the fundamentals are very strong" for the U.S. economy.

Related News: The U.S. economy is growing at a "modest to moderate pace," Fed says in its latest "beige book" review of conditions around the nation.

And about those problems starting to show up in the housing market? "We don't see it as being a broad financial concern or a major factor in assessing the course of the economy," he said back then.

Within weeks, New Century Financial Corp. filed for bankruptcy, marking the first of many mortgage company collapses. The Great Recession officially began in December 2007 and lasted 18 months. The housing market still hasn't recovered.

Today, on this last day of February 2012, Bernanke again spoke to Congress. He said higher gasoline prices could push up inflation "temporarily." But Americans shouldn't worry: "Inflation will remain subdued," he predicted.

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