Fed Chairman Tries To Right Wobbly Economy

Bernanke Downplays Further Interest Rate Cuts, Wants To Nurture Economic Growth

(AP)  Federal Reserve Chairman Ben Bernanke signaled Tuesday that further U.S. interest rate cuts are unlikely because of concerns about inflation. High oil prices are a double-edged sword that can both put a damper on already weak growth and spread inflation, he said.

Bernanke, in prepared remarks delivered via satellite to an international monetary conference in Spain, said that the Fed's powerful doses of rate reductions that started last September along with the government's $168 billion stimulus package, including rebates for people and tax breaks for businesses, should bring about "somewhat better economic conditions" in the second half of this year.

To help brace the U.S. economy, the Fed last month dropped its key rate to 2 percent, a nearly four-year low, but hinted that could be the last reduction for a while. Bernanke drove that point home again on Tuesday.

"For now policy seems well positioned to promote moderate growth and price stability over time," he said.

The Fed's juggling act has gotten harder. It is trying to right a wobbly economy without aggravating inflation.

Many economists believe the Fed will hold rates steady at its next meeting on June 24-25 and probably through much, if not all, of this year. A few believe that inflation could flare up and force the Fed to begin boosting rates near the end of this year.

Bernanke, however, suggested that leaving rates at their current levels should be sufficient to accomplish the Fed's twin goals of nurturing economic growth while preventing inflation from taking off.

Economic growth in the current quarter, he acknowledged, is "likely to be relatively weak." Even as he reiterated the Fed's hope for a pickup in growth in the second half of this year and into 2009, Bernanke said the economy continues to battle against a trio of negative forces - a housing slump, credit problems and fragile financial markets.

Until the slumping housing market and falling home prices show "clearer signs of stabilization," there will continue to be threats to the economic growth getting back to full throttle, he said. Moreover, recent increases in oil prices pose "additional downside risks to growth," he said.

At the same time, if already lofty oil prices, now hovering past $127 a barrel, continue to rise, that could worsen inflation, Bernanke warned.

[tootall10142]

AHHHH! the american dream of matieralistic wealth if we cant get one way just figure out a way the american people can startspending money they dont have AGAIN!That hemi looks good in the drive way nd you look good in that wal-mart suit,just hold left up some so slightly whrn you put on the coat of many colors you peple seem to be so fond of wearing.

[bgwinnett]

Worried about inflation Ben eh?

Well how about stop printing so many Dollars, that might help!

[bluestardad]

YAHN!

HEY YOU IDIOTS STOP BORROWING TRILLIONS FROM CHINA TO SUPPORT IRAQ WAR!

STOP GIVING THE OIL COMPANIES TAX BREAKS TO STEAL FROM THE AMERICAN PEOPLE!

THEN GET BACK TO US!

[Latrocinor]

. Then if you are that sick and tired of being sick and tired of your job tell your boss to go *** him/herself...

Posted by trenticus
.. .. ..

Start you own business and be self employed. Then you''ll have all that freedom and be rich.

[Latrocinor]

In the late 1990''s economists warned of an impending burnout for the "red hot'' economy and called for the FED to raise interest rates to cool it off before disaster.

The FED waited and waited then finally did raise rates but economists said too little and too late.

Even labor opposed a FED interest rate hike due to greed.

FireCEOs got it right. Greed, greed, greed.

[Latrocinor]

SO IF I WAS ALASKA, I WOULD VOTE UNITED STATES OUT OF THE PICTURE..

CAN IT BE DONE???????????

Posted by forthepeopl1
.. .. ..

No.

Read about the US civil war. It will be interesting and enlightening for you.

[fireceos]

The economy is not all that bad. The problems seem to to be greedy companies of all types pushing manufacturing to China and such for the sake of their own pockets, not the consumers.''

The failure of Congress for years and years to FAIL to raise the minimum wage, while voting themselves approval for their own nice salary hikes, and the news media hyping this up for the sake of a story, scaring the bejeebies out of us. Do not succumb to this rhetoric.

Furthermore, the greedy citizens, equally as greedy as all the company CEOs who are now being fired one by one, and not quickly enough, in their quest to keep up with the ''Joneses'' overspent their budget buying Jewel Box homes and McMansions. You get what you deserve. You''ll be begging at my doorstep to buy my very nice but modest house in the near future. I''m going to make a fortune off your greed, finally some satisfaction.

[feelfree4u]

Re: "I am trying to fathom what would happen if there was a national call-out-sick day..."

Posted by trenticus

A General Strike, or an angry, torch-bearing mob, appear to be our most promising options at this point.

[feelfree4u]

Re: "CAN IT BE DONE???????????"

Posted by forthepeopl1

Vermont is making an attempt at this.

Good luck Vermont!

[trenticus-2009]

The grease that has kept the gears of this nation moving and progressing has been and always will be the average American worker earning and spending money. Now thanks to our "goverment" the people who still have jobs are actually earning less and the cost of living continues to rise weekly.

Posted by trillion1

I agree 100%! I am trying to fathom what would happen if there was a national call-out-sick day...Bring the nation to a stand still. Just stay home and do only what you can do at home without going out. Don''t buy gas or food. Sit in the light of only a candle, play board games with the kids and other family members, do some yard work and only cook on the grill. Build a garden to grow your own stuff, finish that little nagging project that you can do without having to spend any money or drive your car. Throw a block party and use the utility companies dime to light the path. It seems that demand is everything and if we can all do this all at once then what demand would there be? Except for, Get your broke *** back to work and earn a living.. Then if you are that sick and tired of being sick and tired of your job tell your boss to go *** him/herself...

[trillion1]

The grease that has kept the gears of this nation moving and progressing has been and always will be the average American worker earning and spending money. Now thanks to our "goverment" the people who still have jobs are actually earning less and the cost of living continues to rise weekly. We literally have a congress that is willing to bring down hundreds of millions for their own monetary gain.

[forthepeopl1]

i have a question for the lawyers out thier. can a state of the united states of america just say our state has voted to get out of the united states of america???

meaning i watch alaska gov.last night saying that one reason they were let into the united states is for
the oil and gas that might be needed some day to help america..but the federal governemnt is not letting them get it to help america WHY.

SO IF I WAS ALASKA, I WOULD VOTE UNITED STATES OUT OF THE PICTURE..

CAN IT BE DONE???????????

[dobbershome]

Noloyalisti

Perfectly said.

[feelfree4u]

The Fed is a gang of greedy pirates, Alan Greedscam is largely responsible for our collapsing housing market and economy, and Ben Bernanke must be about the dumbest son of a *** around to have accepted the helm of the Titanic, just after Greedscam rammed it into the iceberg.

[wardoglrs]

America in chains since 1913. We were warned about the central banks

[shanev137]

The Fed has zero power over oil speculators and he knows it.

[noloyalisti]

The sooner we realize the fed works for the benefit of big corporate America that is profiting off of war and runs the government and the media, the better off we will be.

[dobbershome]

Does anybody else have the feeling this guy does not care what happens to the economy and to the normal middle/lower class working guy/gal? Our economy has been in the tank for a long time and he acts like this is a news flash.

[davidlar2]

Remember, we don''t have inflation, we have a "non-inflationary increase in prices." What a bad joke!!!!

[davidlar2]

What is with the communist postings here?

What is with the praise for Bernanke, who together with Paulson is one of the biggest idiots in government today, making Bush look like a genius.

What world am I living in, where people look to North Korea or the Soviet Union as an economic and political model and where the Federal Reserve Bank is praised for growing money supply at absurd rates while offering an interest rate below the rate of inflation? This is hopeless....