Bernanke Ready To Cut Rates Again

At a meeting with Congress this morning Ben Bernanke stated that the economic outlook has once again deteriorated and signaled that the central bank is ready to keep lowering rates as needed to combat economic deterioration.
Bernanke also stated that the key problems that we are facing in the economy are the housing & credit mortgage crisis, job growth, and high energy prices. The key parts of the mortgage market that have been hit the hardest are subprime and jumbo mortgages. Unsold homes have also piled up and foreclosure rates have climbed to record highs.

“The outlook for the economy has worsened in the recent months, and the downside risks to growth have increased,” Bernanke said today. “To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so.”

Bernanke was quick to say that the Federal Reserve will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks, which indicated that additional rate cuts were likely. Bernanke also stated that his forecast for the economy is to continue a period of sluggish growth. This will be followed by a somewhat stronger pace of growth starting later this year.

Although his forecast envisions an improving economic picture late this year, he states that it’s “important to recognize that downside risks to growth remain, including the possibilities that the housing market or the labor market may deteriorate to an extent beyond that currently anticipated’ or that credit will become even harder to secure.”

To read more about bernanke says fed ready to cut interest rates again head on over to CNBC.