To keep interest rates at a record low, Ben S Bernanke may have to show Congress and investors he can be as creative about soaking up cash from the financial system as he was when pouring it in.
The Federal Reserve chairman will probably outline his strategy for exiting the biggest monetary expansion in history when he delivers his semiannual economic report to Congress tomorrow. Among the options: establishing term deposits at the Fed designed to induce banks to keep money there rather than lending it out, said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey.
Laying out a plan now may give Bernanke leeway to hold down borrowing costs for as long as it takes to reduce unemployment from a quarter-century high.
