Chairman Bernanke says US economy faces big threat.
November 14th 2008 22:38
The U.S. and the global economy, except for a few isolated places, is in a world of hurt, the worst since the Great Depression.
The Beige Book said economic activity had weakened across the country in recent weeks as businesses revisited capital investment plans, consumers curtailed spending and labor markets softened. The Fed described business contacts as "pessimistic."
In his speech, Chairman Ben Bernanke said the housing sector remained the economy's weakest spot, but he also cited "marked slowdowns" in consumer spending, business investment and the labor market.
He said that credit markets would take time to unfreeze and said export sales, until recently a bright spot, were likely to slow as well.
While inflation had been high recently, Bernanke said expectations of future inflation had held steady or eased, import prices were moderating and commodity prices had fallen.
Those factors, along with the softness in the economy should lead to rates of inflation more consistent with price stability," he said that the evidence is now in that the inflation problems are moderating and look to be returning to price stability at a reasonable pace.
St. Louis Federal Reserve Bank President James Bullard said the sharp 1.2 percent drop in retail sales increased the risk of recession . he added the third quarter will be flat to slightly negative and That is going to push up the probability that it will later be named a recession.
Fortunately, most of the time they get things right, but sometimes they are spectacularly and catastrophically wrong. In the current case, being wrong might mean precipitating a global economic disaster of previously unseen magnitude and duration.
The Beige Book said economic activity had weakened across the country in recent weeks as businesses revisited capital investment plans, consumers curtailed spending and labor markets softened. The Fed described business contacts as "pessimistic."
He said that credit markets would take time to unfreeze and said export sales, until recently a bright spot, were likely to slow as well.
While inflation had been high recently, Bernanke said expectations of future inflation had held steady or eased, import prices were moderating and commodity prices had fallen.
Those factors, along with the softness in the economy should lead to rates of inflation more consistent with price stability," he said that the evidence is now in that the inflation problems are moderating and look to be returning to price stability at a reasonable pace.
St. Louis Federal Reserve Bank President James Bullard said the sharp 1.2 percent drop in retail sales increased the risk of recession . he added the third quarter will be flat to slightly negative and That is going to push up the probability that it will later be named a recession.
Fortunately, most of the time they get things right, but sometimes they are spectacularly and catastrophically wrong. In the current case, being wrong might mean precipitating a global economic disaster of previously unseen magnitude and duration.
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