RENEE MONTAGNE, Host:
This is MORNING EDITION from NPR News. Good morning. I'm Renee Montagne.
DAVID GREENE, Host:
From Jackson Hole, Wyoming, NPR's Scott Horsley reports.
SCOTT HORSLEY: Fiscal watchdog Maya MacGuineas has attended several of these meetings. She says it's not just the view of the Grand Tetons that makes them special.
MONTAGNE: You're hiking through the most beautiful scenery I've ever seen, talking about interest rate policy the entire time. Even when you're in the mountains and even when there's bear sightings, people are still thinking about monetary policy and how that works with the economy at large.
HORSLEY: MacGuineas, who heads the Committee for a Responsible Federal Budget, says some are looking for an encore this year.
MONTAGNE: The build-up is tremendous because we all recognize what an important moment it is right now in time, so all eyes will be on Chairman Bernanke when he makes his speech this morning.
HORSLEY: Expectations are high, precisely because the economy has been laid so low. Hiring has slowed sharply since the beginning of the year. Manufacturing appears to be losing steam. And economists like Nariman Behravesh of IHS Global Insight are dialing back their growth forecasts for this year and next.
MONTAGNE: When growth is so weak and the economy is almost at stall speed, if you will, it's not going to take much to knock us down. And it's that kind of a vulnerability to shock that has us quite concerned.
HORSLEY: Behravesh thinks Bernanke is worried too. The Fed's already set short- term interest rates about as low as they can go, and said it's likely to keep them there for two more years. While Behravesh does not expect any big announcement from the Fed chairman today, he does think Bernanke will leave the door open for additional steps if necessary.
MONTAGNE: The Fed has been the firefighter of last resort and if it is indeed sort of running out of powerful weapons, then more of the burden should fall on fiscal policy. But of course the worry is that Congress and the president will punt somehow or make a mistake. Just given what we went through with the raising of the debt ceiling limit, the risks are very high that they could blow it.
HORSLEY: But Mohamed El-Erian, who runs the giant PIMCO bond fund, says these moves would come at a price, and Bernanke knows it.
MONTAGNE: He's been very clear about this, saying that over time the benefits are going down and the expected costs and risks are going up, including political and reputational risk. And that's one thing that the Fed always worries about, because the autonomy of the Fed is critical to good economic policy management.
HORSLEY: Ultimately, El-Erian says, President Obama and Congress need to put their differences aside and tackle the country's most serious economic challenges.
MONTAGNE: The best that the Fed can do is buy some time for the other agencies to wake up. It can provide a bridge. But if the other agencies do not wake up, it will be a bridge to nowhere.
HORSLEY: Scott Horsley, NPR News, Jackson Hole, Wyoming.
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