Bernanke hints at more rate cuts
US Federal Reserve chief Ben Bernanke has hinted that the central bank is
prepared to cut interest rates further to help ease recession fears.
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In his semi-annual report to the US Congress, Mr Bernanke said the Fed would
continue to "act in a timely manner as needed to support growth".
Analysts said his comments increased the likelihood of another rate cut at
the Fed's next meeting on 18 March.
US interest rates are currently at 3% after two major reductions in January.
'Distinctly less favourable'
Despite saying the Fed must continue to keep a close eye on inflation, Mr
Bernanke said economic conditions had become "distinctly less favourable" and
could get worse.
"The risks include the possibilities that the housing market or labour market
may deteriorate more than is currently anticipated and that credit conditions
may tighten substantially further," he said.
Mr Bernanke's downbeat comments are the latest in a series of warnings he has
given this year about the health of the US economy.
Although he said inflation remained a worry, it is expected to go down as
high energy and commodity prices recede.
"The key thing is that Bernanke is talking about providing adequate insurance
against downside risk," said analyst Firas Askari, of BM Capital Markets.
"This is a Fed that is poised to react to growth risks and I think they are
probably doing the right thing in focusing on sluggish growth more than on
inflation.
"They're willing to inject more juice into the system, and that's what they
need to do."
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He: I am not good enough for you.
She: But I am.
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