THE FINANCIAL TIMES: The Federal Reserve is ready to cut interest rates again next month, Ben Bernanke signalled on Wednesday in comments that sent the dollar to a record low against the euro.
The dollar fell below $1.51 after the Fed chairman told Congress the US central bank remained firmly focused on the risks to growth in spite of a run of bad price data. The Fed “will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks,” Mr Bernanke said.
His comments to the House financial services committee suggest the US central bank will cut interest rates again in March. The Fed has cut rates five times since last summer, including two cuts in January, taking rates down from 5.25 per cent at the beginning of August to the current figure of 3 per cent.
Noting that the economic situation is “distinctly less favourable” than when he spoke to the committee last July, Mr Bernanke said the US central bank believed the country was experiencing a broad-based slowdown.
Consumer spending “appears to have slowed significantly” in the face of higher gasoline prices and a weakening labour market, he said, adding: “The business sector has also displayed signs of being affected by the difficulties in the housing and credit markets.”
Moreover, “nonresidential construction is likely to decelerate sharply in coming quarters”. He also said that incoming information since the Fed’s January meeting “continues to suggest sluggish economic activity in the near term”. Dollar hits new low as Fed signals rate cut >>> By Krishna Guha in Washington
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DIE PRESSE:
Der Euro ist nicht zu bremsen
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Mark Alexander (Hardback)
