Fed Chairman Hints at Further Rate Cuts

Washington, D.C.–Federal Reserve Chairman Ben Bernanke implied Thursday that more rate cuts may be necessary to stimulate the economy, The Wall Street Journal reports.Speaking to the Women in Housing and Finance and Exchequer Club in Washington, Bernanke noted that, because financial and economic conditions can change suddenly, the Fed must be observant and ready to act quickly.Bernanke cited higher oil prices, decreased equity prices and falling home values as growing threats to the economy. “In light of recent changes to the outlook for and the risks to growth, additional policy easing may well be necessary,” he said. Bernanke’s comments–his first since the Fed’s Dec. 11 meeting– indicated that he felt the economic outlook for the coming year has decreased while the risks to growth have increased, fueling speculation that the benchmark rate will be reduced by a half percentage point to 3.75 in December, according to Forbes.