- Federal Reserve Board Chairman Ben S. Bernanke said ``additional policy easing may well be necessary'' to offset ``downside risks'' to growth.
- ``In light of the recent changes in the outlook for and the risks to growth, additional policy easing may well be necessary,'' Bernanke said in his first speech on the economy since the Fed's Dec. 11 meeting. ``We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks.''
- Bernanke's comments suggest the Federal Open Market Committee will cut interest rates further this month to reduce the risk of a recession. Wall Street analysts increasingly predict the economy will contract, and traders increased their rate-cut expectations after a report showing unemployment jumped in December.
- ``Incoming information has suggested that the baseline outlook for real activity in 2008 has worsened and the downside risks to growth have become more pronounced,'' Bernanke said in the text of his remarks to Women in Housing and Finance and Exchequer Club in Washington. ``A number of factors, including higher oil prices, lower equity prices, and softening home values, seem likely to weigh on consumer spending as we move into 2008.''
Looks like the markets are just happy that the 'academics' at the Fed realize its "bad out there". Probably just short covering at this time; unfortunately we need actual buyers, not just shorts covering. I think Uncle Ben just stated the obvious (?) was any of it a surprise, but it appears the Street is so down on the Fed they have doubts they will even cut.
Maybe the NYTimes calling him a weanie got him revved up today.
