Cyrillic Partners

Bernanke and Paulsen went before the Senate Banking Committee today to say that the economy is slowing down but a full-blown recession is unlikely. Big Ben also said he’s not afraid to push the rate-cut button if the economy starts to free-fall.

Perhaps more interesting was what the senators had to say during the meeting, from CNN:

Sen. Charles Schumer, D-N.Y., suggested the problems in credit and financial markets pose a greater threat to the economy than a slowdown in consumer spending.

“Aren’t you underestimating, not giving enough attention to, the severity of the problem in the credit markets?” asked Schumer. He said Wall Street executives he’s talked to “seem much more worried” about credit woes than Paulson and Bernanke.

No question who butters Schumer’s bread. It’s not the first time he’s said nasty things to Bernanke either. He did a chicken little dance back in November (read our coverage). But as Bernanke has pointed out before, the current downturn is hitting financial institutions a lot harder than the rest of the economy. Fed Governor Mishkin already said that Wall Street’s losses weren’t going to be Fed priority numero uno back in November (read our coverage).

Trackback URI | Comments RSS