World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search

 


US Central Bank Chief Expects Economy To Slow


US Central Bank Chief Expects Economy to Slow

U.S. central bank chief, Ben Bernanke, told a congressional committee Thursday he expects the economy to slow noticeably as a result of the credit squeeze related to bad loans in the housing sector. VOA's Barry Wood has more from Washington.

Bernanke told the Joint Economic Committee that growth in the short-term will slow substantially from the nearly four percent pace of the July to September period.

He said the Federal Reserve will respond as needed to boost the economy. Bernanke said with housing weak, the dollar sagging and oil prices soaring, there are risks of both higher inflation and an economic slowdown.

He said higher gasoline prices were likely to have an impact on U.S. consumer behavior.

"I would just point out that, while it has its effects on consumer spending, it's obviously also an inflation risk, both because gasoline prices are part of the consumers basket [of purchases] and therefore part of inflation," said Bernanke. "And, even more concerning would be if those gas prices feed through into other costs and lead to a broader rise in prices."

Worried that a weak dollar and higher priced oil could plunge the U.S. economy into a recession, prices on the New York stock exchange have fallen sharply.

Bernanke declined to comment on the dollar's steady decline against most other major currencies, with the notable exception of the Chinese renminbi.

Bernanke was asked about China's role in the world economy and what it should do to promote balanced global growth.

"They need to increase the flexibility of their exchange rate in order to allow for the natural process of demand to shift away from a totally export oriented economy to a more balanced, domestic oriented economy," he said.

China allows only gradual changes in its exchange rate, managing the renminbi in a tight trading range against the U.S. dollar.

Bernanke expressed concern about the distress being felt by many Americans who are struggling to keep up with the payments on their homes.

He suggested that lenders should do more to prevent repossessions of homes where borrowers are unable to pay. But he said the mortgage problems that have been affecting people with risky variable rate bank loans are likely to worsen before they improve.

ENDS

More: Latest World News | Top World News | World Digest | Archives

© Scoop Media

 
 
 
 
 
World Headlines

 

At The UN: Paris Climate Agreement Moves Closer To Entry Into Force

The Paris Agreement on climate change moved closer toward entering into force in 2016 as 31 more countries joined the agreement today at a special event hosted by United Nations Secretary-General Ban Ki-moon. More>>

ALSO:

ALSO:

Gordon Campbell: On The End Game In Spain (And Other World News)

The coverage of international news seems almost entirely dependent on a random selection of whatever some overseas news agency happens to be carrying overnight... Here are a few interesting international stories that have largely flown beneath the radar this past week. More>>

Amnesty/Human Rights Watch: Appalling Abuse, Neglect Of Refugees On Nauru

Refugees and asylum seekers on Nauru, most of whom have been held there for three years, routinely face neglect by health workers and other service providers who have been hired by the Australian government, as well as frequent unpunished assaults by local Nauruans. More>>

ALSO:

Other Australian Detention

Gordon Campbell: On The Censorship Havoc In South Africa’s State Broadcaster

Demands have included an order to staff that there should be no further negative news about the country’s President Jacob Zuma, and SABC camera operators responsible for choosing camera angles that have allegedly made the President ‘look shorter’ were to be retrained... More>>

ALSO:

Gordon Campbell: On A Bad Week For Malcolm Turnbull, And The Queen

Malcolm Turnbull’s immediate goal – mere survival – is still within his grasp... In every other respect though, this election has been a total disaster for the Liberals. More>>

ALSO:

Gordon Campbell: On Bidding Bye Bye To Boris

Boris Johnson’s exit from the contest for Conservative Party leadership supports the conspiracy theory that he never really expected the “Leave” option to win the referendum – and he has no intention now of picking up the poisoned chalice that managing the outcome will entail... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
World
Search Scoop  
 
 
Powered by Vodafone
NZ independent news