Bernanke Warned Of Sluggish Growth

Today I was reading an article by Jeannine Aversa AP Economics Writer. The money news article was again about Bernanke adressing Congress that the Business Growth of the US will be sluggish. "The economic situation has become distinctly less favorable," Bernanke warns pointing out some causes like the deteriorating job market, the slump in home sales, and credit problems that have increased. Bernanke contintued his warning, adding that the Feds need to watch the price increase in energy which could further dampen the economic growth. Bernanke is talking about another cut to the key interest rate, as an insurance to prevent down swing risks.

Jeannine also states in her written news report: The central bank, which started lowering a key interest rate in September, has since become more aggressive. Over just eight days in January, it slashed rates by 1.25 percentage points -- the biggest one-month reduction in a quarter century. Economists and Wall Street investors predict the Fed will cut rates again at its next meeting on March 18. There are dangers that the economy will weaken even further. "The risks include the possibilities that the housing market or labor market may deteriorate more than is currently anticipated and that credit conditions may tighten substantially further," Bernanke cautioned.