Bernanke hints at further US interest rate cuts

In a speech to the US Senate overnight, Bernanke says downside risks to economic growth are continuing to increase, despite reasonably well anchored inflation expectations. Bernanke highlighted more-expensive and less-available credit as the “source of restraint” on economic growth, as banks move to further tighten lending standards. The Federal Open Market Committee’s (FOMC) 125 basis points drop in January will aid the economy over time, the Fed chairman added, but he says further moves will be taken if warranted. “At present, my baseline outlook involves a period of sluggish growth...