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Bernanke Hints At Rate Cut To Help Boost U.S. Economy

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The Tampa Tribune

Published: November 30, 2007

WASHINGTON - Federal Reserve chairman Ben Bernanke on Thursday hinted that another interest rate cut may be needed to bolster the economy. The worsening credit crunch, a deepening housing slump and rising energy prices probably will create some "headwinds for the consumer in the months ahead," he said.

Bernanke said he expects consumer spending will continue to grow and suggested the country can withstand the current problems without falling into a recession.

The odds have grown that the country could enter a recession. A sharp cutback in consumer spending could send the economy into a tailspin. Against this backdrop, Fed policy-makers will need to be "exceptionally alert and flexible," Bernanke said.

That comment probably will be viewed as a sign the Fed may lower interest rates when it meets on Dec. 11, its last session of the year.

"Bernanke is leaning in the direction of a rate cut," said Brian Bethune, economist at Boston-based Global Insight.

The Associated Press

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