Bernanke: Markets under stress, outlook uncertain

Umm, yea…

A weakening housing market, a strained banking system, and rising oil prices threaten the U.S. economy, and restoring financial market stability is a top priority, Federal Reserve Chairman Ben Bernanke said on Tuesday.

It was a gloomier assessment than the central bank’s policy-setting panel gave in late June, when it said risks to economic growth had diminished somewhat.

Bernanke, in his semi-annual testimony on economic conditions to lawmakers on Tuesday, acknowledged that financial markets had grown increasingly anxious in recent weeks, particularly over the financial condition of mortgage finance companies Fannie Mae and Freddie Mac.

He stressed that the outlook for economic growth and inflation was unusually uncertain. Investors took that as a signal that the Fed would keep interest rates unchanged at least through August, and perhaps through the end of the year.

“The possibility of higher energy prices, tighter credit conditions, and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth. At the same time, upside risks to the inflation outlook have intensified lately,” he said.

July 15, 2008 | Filed Under depression

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One Response to “Bernanke: Markets under stress, outlook uncertain”

eliana on July 15th, 2008

Yuck, I don’t know about all that. If you noticed, Bernanke was very careful -not- to use the word “recession,” but things like “the economy has continued to expand.” What exactly does that mean? I was pretty entertained by this translation of BB’s speech: http://www.236.com/news/2008/07/15/federal_reserve_chairman_ben_b_1_7732.php

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