WASHINGTON (Reuters) – The Federal Reserve could sell some assets later this year in an effort to whittle down its bloated balance sheet to avoid inflation, a senior Federal Reserve official said on Monday.

The Fed’s purchases last year of longer-term Treasuries and other debt, undertaken to help revive the economy, were financed by adding cash to the financial system. But leaving large amounts of cash sloshing around as the economy strengthens risks fueling inflation.

“Maybe you get in the second half of 2010 or something like that, if things are going pretty well, maybe then you’d sell a little bit at that point and you’d try to see how the market reacts,” St. Louis Federal Reserve Bank President James Bullard told Reuters in an interview.

The U.S. central bank should try to get its balance sheet, which has ballooned by more than $1 trillion, down to a normal size before the next recession strikes to ensure it has the ammunition it needs to counter a downturn, Bullard said.

WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke on Wednesday said the Fed must be more transparent to the public but also guard its independence, which serves a vital public interest.

“In the interest of maintaining public confidence and promoting economic and financial stability, we must continue to protect our independence,” he said in remarks at a ceremonial swearing in marking the start of his second four-year term as Fed chairman.

Bernanke faced the stiffest opposition of any nominee in the more than 30 years the Senate has been voting on heads of the central bank. While widely credited for steering the economy through its worst upheaval since the Great Depression, Bernanke endured scathing criticism from lawmakers for his role in easy money and hands-off regulatory policies that many believe set the stage for the crisis.

Bernanke acknowledged the turmoil revealed regulatory gaps at the Fed and elsewhere. The Fed faces “enormous challenges,” and must persuade the public of the integrity of all of its operations, he said.

WASHINGTON, Feb 3 (Reuters) – U.S. Federal Reserve Chairman Ben Bernanke on Wednesday said the Fed must be more transparent to the public but also guard its independence, which serves a vital public interest.

“In the interest of maintaining public confidence and promoting economic and financial stability, we must continue to protect our independence,” he said in remarks at a ceremonial swearing in marking the start of his second four-year term as Fed chairman.

Bernanke faced the stiffest opposition of any nominee in the more than 30 years the Senate has been voting on heads of the central bank. While widely credited for steering the economy through its worst upheaval since the Great Depression, Bernanke endured scathing criticism from lawmakers for his role in easy money and hands-off regulatory policies that many believe set the stage for the crisis.

Bernanke acknowledged the turmoil revealed regulatory gaps at the Fed and elsewhere. The Fed faces “enormous challenges,” and must persuade the public of the integrity of all of its operations, he said.

WASHINGTON (Reuters) – The U.S. Treasury Department on Wednesday announced an $81 billion quarterly debt refunding and said government securities issuance may be peaking, although the government plans to expand its offerings of inflation-protected securities.

The refunding level, which was in line with market expectations, matches a record amount set in the previous quarter, the Treasury said.

The Treasury said it believes it has reached a peak, and is now adequately financed to address a broad range of financing scenarios.

The Treasury said the issuance levels position it to cope with “a very large budget deficit.”

WASHINGTON (Reuters) – Most U.S. banks stopped raising the bar for borrowers at the end of last year and even made it easier for consumers to get some loans, but borrowers continued to pull back, the U.S. Federal Reserve said on Monday.

Most banks stopped tightening lending standards on many types of loans in the fourth quarter of 2009, the Fed said in its quarterly survey of loan officers.

Banks did, however, continue to tighten standards on residential real estate loans in the fourth quarter, and most banks kept in place the stringent standards established over the past two years, the Fed said.

In addition, some banks were tightening terms — such as interest rates and fees charged — for both businesses and households, the Fed said.

WASHINGTON, Jan 28 (Reuters) – The U.S. Senate on Thursday backed Ben Bernanke for a second four-year term running the Federal Reserve, the world’s most powerful central bank, despite deep misgivings over his perceived policy missteps.

Bernanke survived a revolt by lawmakers angry at big banks and their regulators, including the Fed. He still faces acute political pressure to ease economic strains at a time when the U.S. central bank is showing divisions over how much support the economy needs.

U.S. President Barack Obama welcomed the Senate vote and said he looked forward to working with Bernanke going forward.

“As the nation continues to face the consequences of the worst recession in a generation, Ben Bernanke has provided wisdom and steady leadership in the midst of the financial and economic crisis,” Obama said in a statement.

WASHINGTON, Jan 28 (Reuters) – The U.S. Senate on Thursday backed Ben Bernanke for a second four-year term running the Federal Reserve, the world’s most powerful central bank, despite deep misgivings over his perceived policy missteps.

Bernanke survived a revolt by lawmakers angry at big banks and their regulators, including the Fed. He still faces acute political pressure to ease economic strains at a time when the U.S. central bank is showing divisions over how much support the economy needs.

Senators credited Bernanke with steering the economy through a wrenching financial crisis but leveled withering criticism at him. They said his policies sowed the seeds of the turmoil and he initially showed a slow response to the crisis.

“Bernanke fiddled while our markets burned,” said Senator Richard Shelby, the top Republican on the Senate Banking Committee.

WASHINGTON, Jan 27 (Reuters) – The U.S. Senate on Thursday is expected to hold a final confirming vote on Ben Bernanke’s nomination for a second term as chairman of the Federal Reserve, Senate aides said.

The aides said on Wednesday that a vote on confirmation would likely come shortly after senators vote to clear a procedural roadblock to the nomination. Lawmakers could have up to 30 hours to debate the nomination, but are not expected to use all the time.

“We anticipate the confirmation vote tomorrow,” a Democratic aide said. “We think the (confirmation) vote will be tomorrow,” a Republican aide said separately.

Bernanke is widely expected to win confirmation, but only by a relatively narrow margin.

WASHINGTON, Jan 26 (Reuters) – The U.S. Senate on Tuesday moved to clear the way to confirm Ben Bernanke to a second term as Federal Reserve chairman, setting a procedural vote for Thursday in a sign that the needed votes were now secured.

President Barack Obama and Senate Democrats scrambled to drum up backing for Bernanke after a Republican won a stunning upset in a Massachusetts Senate race last week, largely because of voter anger about the economy.

Bernanke was in jeopardy of becoming the fall guy, and sudden doubts about his confirmation roiled financial markets. But a push by the White House and Senate allies slowly coaxed undecided senators into the Fed chairman’s column.

Senate Majority Leader Harry Reid set a vote for Thursday to try to end a procedural roadblock put in place by Bernanke opponents.

WASHINGTON (Reuters) – Ben Bernanke’s prospects for a second term as Federal Reserve chairman brightened on Tuesday as a number of previously undecided senators voiced their support with a deadline looming.

A Reuters poll found 43 senators were likely to support Bernanke, whose four-year term as Fed chief expires on Sunday, with 19 opposing him. Senate Democratic leader Harry Reid said a vote could come on Thursday or Friday.

“We are confident that we will have the votes when it comes time to confirm Bernanke,” a Democratic aide said.

The growing support suggested Bernanke would survive the shock waves that went through the Democratic party when a Republican won a stunning upset in a Massachusetts Senate race last week largely because of voter anger about the economy.