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July 5, 2008 7:22:25 PM CDT

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Fed Chief to Address Market Uproar

Posted Aug 30, 07 5:02 AM CDT in Business    Editor's Choice

(Newser) – Tomorrow, Ben Bernanke will make his first speech since turmoil erupted in the world's financial markets early this month. As Wall Street listens for clues about whether interest rates will be cut next month, the Fed chief be walking a tightrope, the Washington Post observes. If he appears indifferent, panic could deepen; if he seems too anxious to stem losses, he'll encourage more irresponsible investing.

Bernanke observers say his position is that steep falloff in the price of mortgage-backed securities doesn't necessarily require Fed action, but when broader markets freeze, the health of the economy is jeopardized. "The chief characteristic of a financial panic is that investors lose their bearing," says one analyst. Whether interest rates are cut will depend on how much investors' confidence has recovered over the next several weeks.

Source Washington Post

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Chairman of the Federal Reserve Ben Bernanke leaves a meeting on Capitol Hill, Tuesday, Aug. 21, 2007 with Chairman of the Senate Banking committee and Democratic presidential hopeful Sen. Christopher...   (Associated Press)
A specialist on the floor of the New York Stock Exchange keeps his eyes on three monitors late on a down trading day, Wednesday, July 18, 2007. Stocks retreated as investors reacted uneasily to Federal...   (Associated Press)
Federal Reserve Chairman Ben Bernanke. (AP Photo/J. Scott Applewhite/files)   (Associated Press)
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Federal Reserve  • credit crisis  • Wall Street  • Ben Bernanke  • interest rate  • mortgage backed securities  • securities  • mortgage debt


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