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December 2, 2008 10:19:59 AM CST

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Bernanke Suggests Rate Cuts Ahead

Posted Feb 14, 08 9:20 AM CST in US,  Business 

(Newser) – Federal Reserve Chairman Ben Bernanke signaled today that further interest rate cuts might be necessary, citing continuing fallout from the credit and housing market collapses, reports the Wall Street Journal. Bernanke told the Senate Banking Committee he expected "a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary and fiscal stimulus begin to be felt."

But though he forecast an improving long-term outlook, Bernanke cautioned that softening labor markets, high energy costs, and tightening credit may drive the economy back down in the short term. The Fed is widely expected to further cut the key interest rate, which it has already cut by 2.25% since September, in order to stave off recession.

Source Wall Street Journal

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Federal Reserve Board Chairman Ben Bernanke pauses while discussing the near-term economic outlook during testimony before the House Budget Committee on Capitol Hill in Washington in this Thursday, Jan....   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke meets with Senate Banking Committee Chairman, Sen. Christopher Dodd, D-Conn., not shown, Wednesday, Feb. 6, 2008, in Dodd's office on Capitol Hill in Washington....   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke discusses the near-term economic outlook while testifying on Capitol Hill in Washington, Thursday, Jan. 17, 2008, before the House Budget Committee. (AP Photo/Dennis...   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke is seen during a meeting with House Speaker Nancy Pelosi, D-Calif., on Capitol Hill in Washington Monday, Jan. 14, 2008, to discuss ways Congress might act...   (Associated Press)
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credit crisis • Federal Reserve • subprime crisis • US economy • recession • Ben Bernanke • interest rate • interest rate cut • Senate Banking Committee


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