Bernanke Buoys Dow

Reserve officials sharply reduce economic forecast

(NEWSER) - The Federal Reserve issued a bleak assessment of the economy today, predicting weak growth and rising unemployment this year. Fed officials expect the economy to grow between 1.3% and 2% in 2008, the slowest in five years, the New York Times reports. A separate report today showed consumer prices rising, putting the Fed in a tricky spot as it weighs another rate cut against fears of inflation. More»

Bernanke comment, retail profit warnings contribute to slump

(NEWSER) - The Dow fell 80.86 points today, closing at 13,595.46 after companies in the retail sector issued warnings of reduced profits and Fed chairman Ben Bernanke commented that inflation risks are still high. "There are a lot of little things out there that are scaring the market," a trader told the Wall Street Journal. More»

Weak credit and labor markets mean recovery will be slow: Fed chair

(NEWSER) - Ben Bernanke painted a stark picture of the economy today, warning that "formidable headwinds" are working against the incipient recovery. Despite an unexpectedly positive jobs report, the pace of expansion is likely to remain "moderate," the Fed chair said. “Despite the general improvement in financial conditions, credit remains tight for many borrowers,” and the job market “remains weak,” Bernanke said in a speech to the Economic Club of Washington. More»

It'll take a while to 'wring out excesses'

(NEWSER) - The US economy is still in “shambles” even though the crisis in the financial system has abated, Warren Buffett told CNBC today. “It takes a while,” the investor said. “There were a lot of excesses to be wrung out and that process is still underway.” Inflation may become a problem, he predicts, but Wall Street will remain an attractive investment over the next decade. More»

(NEWSER) - Economists think the US unemployment rate will stay above 9% through 2010, the Wall Street Journal survey finds. Accordingly, those in the know believe the Federal Reserve will hold interest rates down at least through spring. “For real people, there is no recovery until the unemployment rate stabilizes,” one economist said. “If the Fed starts raising rates in the face of continued job losses, it could abort a recovery.” More»