JEANNINE AVERSA AP Economics Writer WASHINGTON
Federal Reserve Chairman Ben Bernanke is scheduled to brief Congress today on the economy, which has been walloped by high energy prices and fallout from the housing slump and credit crunch. Bernanke's testimony before the Senate Banking Committee comes just two days after the Fed and the Treasury Department came to the rescue of mortgage giants Fannie Mae and Freddie Mac, offering to throw them a financial lifeline. The companies hold or guarantee more than $5 trillion in mortgages almost half of the nation's total. The Bush administration is asking Congress to increase lines of credit to Fannie and Freddie and to let the government buy their stock. The Fed has offered to let the companies draw emergency loans. The testimony also comes amid a backdrop of rising oil prices and a slumping dollar, and as stock markets overseas tumble amid worries about the U.S. financial system. On Monday, shares of U.S. banks and financial companies swooned on concern that the plan to shore up Fannie Mae and Freddie Mac would not be enough to keep them from failing, which could undermine the U.S. and global financial system.
