Ben Bernanke, a student of the Great Depression, knows what a depression looks like and previously served on the panel that unofficially determines when a depression begins and ends. On Wednesday, Bernanke acknowledged that the US could be headed for a recession. More after the break.
Many economists expect the Fed to cut the key interest rate again at their regularly scheduled meeting at the end of the month, although the Fed has given no indication of their intentions.
The stock market fluctuated yesterday after the Fed’s remarks with the Dow Jones ending yesterday -45 points.
Employers cut jobs both January and February with March’s numbers anticipated be not much different. The unemployment rate is currently at 4.8%.
“Besides lowering interest rates, the Fed has taken a series of extraordinary steps in recent weeks and months to prop up the nation’s financial system. . . In a controversial move, the Fed backed a $29 billion lifeline as part of JP Morgan’s deal to take over the troubled Bear Stearns, the nation’s fifth largest investment house. . . which was on the brink of bankruptcy. Bear Stearns had invested heavily in risky mortgage-backed securities. . . That brought criticism from Democrats and others who contend the Fed is bailing out Wall Street and putting billions of taxpayer dollars at potential risk. . .” (entire article)