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August 30, 2008 9:04:20 CDT

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Bernanke Sees Q4 Slowdown

Posted Nov 8, 07 9:58 CST in Business 

(Newser) – Economic growth will slow "noticeably" through the end of the year and into 2008, Fed chief Ben Bernanke said in prepared testimony for a congressional panel today. Bernanke called the economy "resilient," but said the housing slump will intensify before it's over, the Wall Street Journal reports. He predicted that the sluggishness will persist several months into the year, as delinquencies on adjustable-rate mortgages continue to rise.

Bernanke said he and his colleagues at the Fed see growth "remaining sluggish during the first part of next year, then strengthening as the effects of tighter credit and the housing correction begin to wane."  He said the recent interest rate cut had put the dangers of inflation and recession in balance, lowering hopes on Wall Street that the Fed would go for another rate cut at its December meeting.

Sources Wall Street Journal, Associated Press

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U.S. Federal Reserve Chairman Ben Bernanke is seen at the International Monetary Fund Headquarters in Washington in this Oct. 20, 2007 file photo. (AP Photo/J. Scott Applewhite, file)   (Associated Press)
Federal Reserve Chairman Ben Bernanke is shown in this 2006 file photo in Chicago. A deepening housing slump probably will be a "significant drag" on economic growth into next year and it will take time...   (Associated Press)
Federal Reserve Chairman Ben Bernanke waits to address a dinner meeting of the Economic Club of New York Monday, Oct. 15, 2007, in New York. (AP Photo/Jason DeCrow)   (Associated Press)
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Federal Reserve  • subprime mortgages  • recession  • housing crisis  • Ben Bernanke


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