Mr. B’s Musings

February 27, 2008
By seadmin

Federal Reserve Chairman Ben Bernanke warned Congress today that the nation is in for a period of sluggish business growth, but the good news for the markets is that he also sent a clear signal that interest rates will be cut yet again.

Here are a few of the best quotes from Mr. B’s musings, given today to the House Financial Services Committee.

On the current economy:

"The economic situation has become distinctly less favorable…"
Incoming barometers continue to "suggest sluggish economic activity in the near term."

On rate cuts:

The Fed "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks."

On housing and credit:

"The risks include the possibilities that the housing market or labor market may deteriorate more than is currently anticipated and that credit conditions may tighten substantially further."

On inflation:

There are "slightly greater upside risks" that inflation could turn out to be higher than the Fed currently anticipates given the recent run-up in energy and food prices.

"Should high rates of overall inflation persist, the possibility also exists that inflation expectations could become less well anchored."

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