“We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” says Fed Chairman Ben Bernanke just 2 hours ago in a prepared statement.
(courtesy of the Associated Press)
Pledging to slash interest rates yet again to prevent housing and credit problems from plunging the country into a recession, the Fed Chief made clear the central bank was prepared to act aggressively to rescue a weakening economy. The above statement is a bold one that flies in the face of recent criticism that Bernanke has not acted more aggressively to deal with the economy's problems.
Some economists believe the Fed will slice its key interest rate by a half percentage point when the Fed meets next on Jan. 29 and 30. Others, however, think the Fed will go with a more modest one-quarter percentage point reduction, given concerns that high energy prices could spark inflation.
Federal actions over the course of 2007 have resulted in 3 lowered key rates, including its last cut, on Dec. 11, which left the rate at 4.25 percent, a two-year low.
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