Wednesday, October 04, 2006

bernanke today and yesterday / flip flopping

bernanke today/heute

Bernanke: Housing sector weakness a major drag on economy

There is a "substantial correction" underway in the housing sector that is slowing the entire economy, said Fed chief Ben Bernanke on Wednesday. "I think I would estimate that slowing housing construction will probably take about a percentage point off growth in the second half of the year and probably something going into next year as well," Bernanke said.

It was "difficult to tell" how long the slump in construction would last, he said, because of buyers and sellers have moved to the sidelines. There are "some strong fundamental underpinnings" for the housing market including continued low mortgage rates.

The Fed is watching carefully to see whether the housing weakness spills over into other sectors. "To this point, other parts of the economy are remaining relatively strong," he said. Bernanke said the Fed remains concerned about inflation, but said it should continue to slow gradually

bernanke im oktober 2005

Fed Nominee Has Said 'Cooling' Won't Hurt

Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee.

But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs, incomes and the number of new households.and that he believes the economy could weather a housing slowdown."House prices are unlikely to continue rising at current rates," said Bernanke, who served on the Fed board from 2002 until June. However, he added, "a moderate cooling in the housing market, should one occur, would not be inconsistent with the economy continuing to grow at or near its potential next year."

to be continued........



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