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.