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Bernanke says recession possible (Posted Date :Thursday, April 3, 2008) |
Fed chairman won’t tip his hand on future interest rate cuts
WASHINGTON (AP) — Ben Bernanke knows a recession when he sees one, and he’s starting to sound like that’s just what he expects to see.
A student of the Great Depression, the Federal Reserve chairman once served on the very panel of experts that unofficially determines when recessions begin and end — a finding that usually comes well after the fact.
Now for the first time, Bernanke as Fed chief acknowledged on Wednesday that the U.S. could reel into recession from the powerful punches of housing, credit and financial crises. Yet, he was coy about the Federal Reserve’s next move.
With home foreclosures swelling to record highs and job losses mounting, Bernanke offered Congress an unflinching — and more pessimistic — assessment of potential damage to the national economy.
“A recession is possible,” said Bernanke, who in his two years at the helm is under immense political and public pressure to turn things around. “Our estimates are that we’re 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.”
Under one rule of thumb, six straight months of a shrinking economy would constitute a recession, but Bernanke wasn’t getting into that. “A recession is a technical term,” he said. “I’m not yet ready to say whether or not the U.S. economy will face such a situation.”
Whether or not the economy already has fallen into its first recession since 2001 — and many economists believe it has — the housing debacle and other economic woes are a major concern for homeowners, job losers and investors. That means they’re a concern to Congress and the presidential contenders, too.
The Fed and the White House have been thrust into crisis-management mode.
By : Associated Press via Daily Press |
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