Tags: Buffett | Fed | Act | bernanke

Buffett to Fox Business Network: The Fed Had to Act, Did Right Thing in Crisis

Friday, 04 May 2012 07:09 AM

By Newsmax Wires

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., said the U.S. Federal Reserve made the right moves in combating the 2008 credit crisis and ensuing recession.

The central bank “did the right thing,” Buffett, 81, told the Fox Business Network in an interview.

"They saw a country in freefall three and a half years ago, and they had to act in a big way. They had to convince the American public that they had the will and ability to step in when nobody else was stepping in and the whole world was the deleveraging," he said.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

"Somebody had to leverage up and it was only going to be the Fed."

The Federal Reserve has slashed interest rates and rolled out two rounds of extraordinary stimulus policies known as quantitative easing, asset purchases from banks designed to flood the economy with liquidity to encourage investment and hiring.

Talk of a third round, dubbed QE3, rises and falls each week, with disappointing indicators spurring talk it's coming and stronger indicators spurring talk it's not going to happen, roiling markets in the process.

Mohamed El-Erian, CEO of Pimco, manager of the world's largest bond fund, says the Federal Reserve has done all it can to prop up the economy and it's time for Congress to muster the political will and push through policies that will hasten recovery.

"What should happen is that the Fed should be less activist and other government entities should step up to their responsibilities," El-Erian says, referring to congressional inability to narrow deficits and pay down debts, CNNMoney reports.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did


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