Bernanke Hints At More Rate Reductions
BY Sue Kirchhoff
USA Today
Federal Reserve Chairman Ben Bernanke signaled that the central bank is ready cut interest rates further to combat a "sluggish" economy, even though inflation has jumped more than expected.
"The risks to this outlook remain to the downside," Bernanke told the House Financial Services Committee, emphasizing that the Fed will act in a "timely manner" to "provide adequate insurance" against an economic downturn.
The remarks came as a report showed new home sales fell in January to the slowest rate in nearly 13 years.
Further, the Commerce Department said orders for big-ticket goods such as cars and refrigerators slumped.
The economy grew at a lackluster 0.6 percent annual pace in the final months of 2007, and things appear no rosier in recent weeks.
Hiring has slowed, home values are falling, and consumer spending, two-thirds of the economy, is crimped.
For now, the Fed sees slowing growth as the chief threat.
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