Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Bernanke Hints at Hefty Interest Rate Cuts

Fed hopes to thwart troubled markets, unemployment

By Matt Cantor,  Newser Staff

Posted Jan 10, 2008 1:30 PM CST

(Newser) – The Federal Reserve may make "substantive" cuts to interest rates later this month in the face of rising economic difficulties, Ben Bernanke said today. Citing troubled financial markets and rising unemployment, the Fed chairman implied that it might drop its target short-term interest rate by .5% from 4.25%. “We stand ready to take substantive additional action as needed to support growth,” Bernanke said.

With prices rising for food and energy, inflation is also a worry, Bernanke said during a speech in Washington that briefly moved stocks higher. "The demand for housing seems to have weakened further," he said, adding that "higher oil prices, lower equity prices, and softening home values seem likely to weigh on consumer spending as we move into 2008."

Traders, including Michael Raynor, foreground, work on the floor of the New York Stock Exchange Monday Jan. 7, 2008.  Wall Street rebounded Monday amid speculation that the Federal Reserve will continue its campaign of interest rate cuts to ward off a recession.  (AP Photo/Richard Drew)
Traders, including Michael Raynor, foreground, work on the floor of the New York Stock Exchange Monday Jan. 7, 2008. Wall Street rebounded Monday amid speculation that the Federal Reserve will continue...   (Associated Press)
Federal Reserve Chairman Ben Bernanke speaks at the 2007 Charlotte Chamber annual meeting in Charlotte, N.C. on Thursday, Nov. 29, 2007. Bernanke announced more likely interest rate cuts today in Washington.(AP Photo/Nell Redmond)
Federal Reserve Chairman Ben Bernanke speaks at the 2007 Charlotte Chamber annual meeting in Charlotte, N.C. on Thursday, Nov. 29, 2007. Bernanke announced more likely interest rate cuts today in Washington.(AP...   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke discusses the economic outlook while testifying on Capitol Hill in Washington, Thursday, Nov. 8, 2007, before the Congressional Joint Economic Committee. Bernanke announced likely interest rate cuts today for later this month. (AP Photo/Dennis Cook)
Federal Reserve Board Chairman Ben Bernanke discusses the economic outlook while testifying on Capitol Hill in Washington, Thursday, Nov. 8, 2007, before the Congressional Joint Economic Committee. Bernanke...   (Associated Press)
« Prev« Prev | Next »Next » Slideshow
To report an error on this story, notify our editors.
A snapshot of the day's best news stories.
 
COMMENTS
Be the first to comment on this story.

More Newser Stories

Bernanke Signals New Rate Cuts

Inflation Spikes, Cut in Jeopardy

Fed Cuts Key Rate by Half Point

Fed Remains Open to More Rate Cuts

Fed Weighs Emergency Rate Cut


NEWS FROM OUR PARTNERS
Other Sites We Like:   24/7 Wall St.   |   Betty Confidential   |   BuzzFeed   |   Cracked   |   Fark   |   Timelines   |   The Frisky   |   Geek Sugar   |   NewsOne