Fed Chairman Says U.S. Recession a Possibility

Washington, D.C.–Federal Reserve Chairman Ben Bernanke for the first time said Wednesday that the housing slump, credit crunch and financial crisis could drive the U.S. into a recession.However, when speaking to Congress, Bernanke was vague about the Fed’s next course of action, the New York Times reported Thursday.”A recession is possible,” Bernanke told Congress. ”Our estimates are that we’re slightly growing at the moment, but we think that there’s a chance that for the first half as a whole there might be a slight contraction.”However, Bernanke said he was “not yet ready” to say if the U.S. definitely would face a recession.Senators questioned Bernanke about the Fed’s plans to help Wall Street firm Bear Stearns and about what the Fed felt Congress and the White House should do to aid homeowners.Bernanke didn’t offer specific suggestions, but proposed Congress work to bolster the housing market and to help prevent further foreclosures, which frustrated some senators–including Sen. Edward Kennedy, D-Mass.–who felt the answer was too vague.