U.S. economic crisis facing the triple Bernanke publicly admitted for the first time a recession may be

According to Agence France-Presse reported April 2 that the U.S. Federal Reserve Chairman Ben Bernanke, Washington time Wednesday to members of Congress warned that the U.S. economy in the first half of 2008 may not increase substantially, "may even be a slight tightening." Bernanke as suggesting the U.S. economy may already be in recession in the process, which is also the first time he publicly acknowledged the U.S. economy may decline.


In view of the U.S. economy is currently facing the housing crisis, credit crisis and financial crisis, such as "triple crisis," Bernanke to the U.S. Congress Joint Economic Committee (Joint Economic Committee of Congress) to provide testimony, the state has made short-term outlook for the economy than previously A more pessimistic assessment. But he was not clear on whether the Federal Reserve will cut interest rates next position.


Bernanke in testimony before Congress in prepared remarks for the first time publicly admitted the possibility of a recession in the U.S. economy. Economists regard to the general economic recession is defined as: two consecutive quarters of economic activity continued to contract, shall be deemed to have deterioration of the recession. Bernanke in testimony to the congressional joint economic committee, said: "The present situation shows that in the first half of 2008, real gross domestic product (GDP) growth, even if the growth rate will not be great, or even a slight contraction."


At the same time, however, Bernanke hinted that any recession will be mild. In his testimony, said: "We expect that economic activity in the second half of this year will be strengthened, the incentive of monetary and fiscal policy will play some role."


The latest official statistics show that in the fourth quarter of 2007, a year ago with the U.S. economy grew 0.6 percent, almost at a standstill. A large number of analysts said that the United States in 2008 and even further weakening of economic activity, Bernanke said that while the share that view. He said: "Compared to the Federal Open Market Committee (FOMC) released by the end of January outlook, the recent economic outlook has weakened."


Bernanke also stressed that the central bank has taken a lot of action, including a significant reduction in key interest rates, relaxation of direct loans to banks, as well as opening up the Fed's control of the Corporation's credit, and so on in order to ease the housing market to collapse of the credit market caused by pressure .


Bernanke said: "Despite the recent action seems to have helped to stabilize the situation in the market, but financial markets are still a lot of stress are. Since the beginning of the end of last year, short-term capital market once the pressure eased, but now Have once again enhanced. "


At the same time, Bernanke in testimony to the Federal Reserve rescue of investment bank Bear Stearns defended the action, the Fed said it intended to market to avoid "chaos" volatile situation, it could trigger a wider economic Impact. He also said that the U.S. Federal Reserve rescue Bear Stearns in the case facing the "public policy challenges."


Bernanke also disclosed for the first time, Bear Stearns in March 13 to inform the Ministry of Finance and the Federal Reserve of its serious liquidity problem, if there is no special financing, the company will apply for the second day of Chapter XI bankruptcy protection. He said that Bear Stearns bankruptcy would be very serious consequences. He said: "As the financial environment is very fragile, and once all of a sudden collapse of Bear Stearns, may lead to a series of problems in the market disorderly carried out on the floor, which would seriously shake the confidence of the market."


Bernanke stressed that: "Based on the global economy and financial system is currently facing unusual pressure, the collapse of Bear Stearns losses may be very serious and extremely difficult to control. Not only that, or even adverse effects will not be able to limit the financial system But may, through its credit and the value of the assets, the impact of a wide range of economic entities. "


Finally, Bernanke said that the supervision of the Ministry of Finance reform plan was "useful and effective," the first step, the Federal Reserve will continue to monitor the market to ensure financial stability. However, he pointed out that most of the necessary economic and financial market adjustment has been completed, monetary and fiscal policies should be able to support the U.S. economy in the second half of this year, as well as the resumption of growth next year. He thus implied that the future may no longer need to take additional monetary policy to stimulate the economy.
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