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| Bernanke says 2008 outlook worse | |
| (10 minutes later) | |
| Federal Reserve chief Ben Bernanke has said that the outlook for the US economy in 2008 has worsened. | Federal Reserve chief Ben Bernanke has said that the outlook for the US economy in 2008 has worsened. |
| His comments come after leading investment banks warned that the US was heading for a recession. | His comments come after leading investment banks warned that the US was heading for a recession. |
| However, Mr Bernanke said the central bank was willing to act in a decisive and timely manner to ensure the economy remained on an even keel. | |
| The Fed has recently cut interest rates to counter slowing economic growth and problems in the housing market. | The Fed has recently cut interest rates to counter slowing economic growth and problems in the housing market. |
| The bank has cut rates twice since the summer, most recently in December to 4.25% - its lowest in two years. | |
| During his speech on Thursday, Mr Bernanke said the Fed was prepared to "take substantive additional action as needed to support growth and to provide adequate insurance against downside risks". | |
| Some analysts say this is tantamount to saying the bank is prepared to cut interest rates again when it next meets at the end of this month. | |
| Earlier this month, Merrill Lynch controversially said the US had already entered a recession, while Goldman Sachs has said it is heading in that direction. |