Bernanke Hints at Rate Cut
WASHINGTON -- Federal Reserve Chairman Ben Bernanke has given strong hints recently that he's in favor of another interest rate cut to bolster the sagging economy.
The Chairman expressed confidence in the overall economic picture but allowed that the growing risk of recession would see prompt action by the Fed. He said that policymakers would be "exceptionally alert and flexible."
Volatility in the stock market and rising oil and gas prices together with a credit crunch and a troubled real estate market are all cited as reasons to expect a cut.
The economic outlook has been "importantly affected over the past month by renewed turbulence in financial markets, which has partially reversed the improvement that occurred in September and October," Bernanke said. "These developments have resulted in a further tightening in financial conditions, which has the potential to impose additional restraint on activity in housing markets and in other credit-sensitive sectors."