Bernanke vows to stave off recession
11 January 2008
The Chairman of the US Federal Reserve, Ben Bernanke gave a dovish speech last night to the world’s economic press, indicating the Fed’s stance in light of the continued deterioration of the US economy. The Chairman proposed that he would be prepared to take the necessary action, no matter how substantial, in order to support growth and prevent any implications of a recession. His comments reinforced the market’s view that interest rates will be cut at the end of this month and that chances of a 0.5% cut have risen substantially.
Bernanke’s speech comes amid news that a host of high profile retailers have struggled over the crucial Christmas period, reporting weaker than expect sales figures. As consumer spending tends to be a key driver of economic growth for the US economy, the market will notably anticipate the release of forth-quarter growth figures to establish whether the onset of a recession is likely.