Rate Cut - December 11th

Fed Chief Hints at Another Rate Cut

Federal Reserve Chair Ben Bernanke suggested Thursday that another rate cut might be in the works. The economic outlook has been "importantly affected over the past month by renewed turbulence in financial markets, which has partially reversed the improvement that occurred in September and October," Bernanke told a group of business people in North Carolina. A copy of the speech was widely distributed."

These developments have resulted in a further tightening in financial conditions, which has the potential to impose additional restraint on activity in housing markets and in other credit-sensitive sectors," he said.

Analysts interpreted this to mean that "Bernanke is leaning in the direction of a rate cut," at the Fed’s next meeting Dec. 11, says Brian Bethune, economist at Global Insight.

Source: The Associated Press, Jeannine Aversa (11/30/07)