Saturday, February 16, 2008

Ben B. Said What?

"The outlook for the economy has worsened in recent months,” admitted the sitting Fed Chairman Ben Bernanke before Congress yesterday, “and the downside risks to growth have increased."
The U.S. economy will not go into recession, but endure a period of “sluggish growth,” said the chairman, "followed by a somewhat stronger pace of growth starting later this year." But “the housing market or the labor market may deteriorate to an extent beyond that currently anticipated, or… credit conditions may tighten substantially further."
Umn… weren’t these the very concerns he’s testifying about?
Minutes later, after acknowledging the “steep run-up” in energy prices and the “exceptionally rapid” rise of food prices, the Fed chairman suggested, "Inflation expectations appear to have remained reasonably well anchored.”
To sum up: The economy is slowing, housing and wages are “deteriorating,” credit is increasingly hard to come by, food and energy are going through the roof. But inflation is contained. And the economy is just fine.

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