Bernanke Vows to Combat Mortgage Mess

Fed ready to step in; Wall Street holds out hope for rate cuts
By Wesley Oliver,  Newser Staff
Posted Aug 31, 2007 1:07 PM CDT
President Bush, center, accompanied by Treasury Secretary Henry Paulson, right, and Housing Secretary Alphonso Jackson, makes a statement on home ownership financing, Friday, Aug. 31, 2007, in the Rose...   (Associated Press)
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(Newser) – In his first comments on the subprime mortgage meltdown, Ben Bernanke today vowed the Federal Reserve “will act as needed” to contain the turmoil, preventing it from weakening the broader economy. The Fed chief pledged the central bank would “take additional actions” if necessary. “It is clear now the Fed is on the ball,” an economist said.

The comments, at a Wyoming symposium, inspired chatter that the Fed would cut rates at next month's policy meeting, Bloomberg says. But Bernanke also made it clear that investors who have made questionable decisions shouldn't expect the Fed to rescue them, saying it was not the bank’s “responsibility.” (Read more Federal Reserve stories.)