InTheNews.co.uk
Breaking News:
Your source for news

World News Story

 30 August 2008 13:13 BST

Fed boss tells Congress US "recession is possible"

Thursday, 03 Apr 2008 11:18
Ben Bernanke, Fed chairman said US "recession possible"
Federal Reserve chairman Ben Bernanke has admitted to Congress "recession is possible" in the US as the economy shrinks.

Mr Bernanke told a congressional panel yesterday that the economy may shrink in the first half of 2008, but interest rate cuts and other emergency measures should help growth to pick up later in the year.

"Recession is possible," Bernanke told the Joint Economic Committee. "Our estimates are that we are slightly growing at the moment, but we think that there's a chance that for the first half as a whole, there might be a slight contraction."

Interest rates have been cut in the US by three percentage points to 2.25 percent since mid-September, to support an economy hit by housing market woes and financial turmoil.

The Fed boss also defended the central bank's decision to rescue investment bank Bear Stearns from collapse last month.

"We did what we did because we felt it was necessary to preserve the integrity and viability of the American financial system, which in turn is critical for the health of the economy," Mr Bernanke said.

Asked whether other Wall Street institutions were about to fail, Mr Bernanke said he was unaware of any.

During his testimony, Mr Bernanke also urged Congress to tackle two areas vital to the economy: education and energy. Better education and less of a reliance on oil would help avoid future financial crises, the Fed's chairman said.End of story


More world news... 

Also In The News 

© 2004- 2008 www.inthenews.co.uk. Advertise | Privacy | Terms of Use