Bernanke gives out with the bad news

Jamaica News.Net
Wednesday 14th May, 2008

US Federal Reserve Chairman Ben Bernanke claims the US credit crisis is ongoing.

In a New York speech, Bernanke said: 'Conditions in financial markets are still far from normal. This process is likely to take some time.'

His further speech highlighted the Fed's ongoing predicament of preventing economic growth from slumping too deeply while grappling with price pressures that are largely out of its control.

Other Fed officials in separate speeches seemed increasingly worried that rising energy costs would put upward pressure on inflation, potentially dampening their zeal in cutting rates further.

Bonds sold off sharply following the comments and futures markets began pricing in strong prospects for higher interest rates by year-end.

Stocks improved on the comments.

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