BERNANKE CALLS FOR FISCAL RESOLUTION

FEDERAL Reserve chairman Ben Bernanke urged Congress to “lay out a [fiscal] plan that will be credible” for the US, yesterday. Bernanke estimated that the Republicans’ preferred $60bn spending cuts would knock 0.2 per cent off GDP in its first year, far below other forecasts. While not endorsing the Republican plans, he said an unsustainable deficit would eventually cause a spike in interest rates, derailing the recovery.