Will he advocate an easing of credit in order to avoid the recent tightening in the markets?  Some in Wall Street and banks hope so, but I suspect they will keep the rates set at current levels.  The Housing market situation is a real threat to the economy, but cheap credit was part of the reason a real estate market developed in the first place.  We don’t want to dry everything up since the real estate market is still a positive engine for growth, but we don’t want lenders going back to the way things were a couple of years ago with overly creative financing plans that get people in houses they clearly can’t afford over the long run.  It’s a balancing act and I am sure Bernanke will be criticized no matter what he does, but a steady hand is needed at the moment, its time to be nervous, but not panicky.

Also, a good look at how the real estate bubble formed.