US recovery fragile
Federal Reserve chairman Ben Bernanke (above) on Monday tamped down speculation that essentially zero interest rates were set to rise, saying the US recovery from recession remains fragile. --PHOTO: AP
WASHINGTON - FEDERAL Reserve chairman Ben Bernanke on Monday tamped down speculation that essentially zero interest rates were set to rise, saying the US recovery from recession remains fragile.
'Though we have begun to see some improvement in economic activity, we still have some way to go before we can be assured that the recovery will be self-sustaining,' he said in a speech to the Economic Club of Washington.
Mr Bernanke said the recovery faces 'some formidable headwinds,' particularly the weak jobs market and tight credit conditions. 'My best guess at this point is that we will continue to see modest economic growth next year - sufficient to bring down the unemployment rate, but at a pace slower than we would like,' he said.
As the economy crawls out of the deep recession that began in December 2007, a stronger-than-expected November jobs report on Friday set markets abuzz with speculation that the Fed would order a rate hike sooner than previously anticipated.
Mr Bernanke concentrated on the 'headwinds' to growth in his comments, said Ian Shepherdson, chief US economist at High Frequency Economics.
'He does not sound to us like a man with his finger on the trigger, or indeed anywhere near it,' Mr Shepherdson said. -- AFP
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