Ben Bernanke Admits That He Doesn’t Know Why The Economy Is Stalling
The Federal Reserve Chairman sounded almost befuddled yesterday when during a press conference yesterday where he explained the central bank’s recent decision to keep interest rates low. “We don’t have a precise read on why this slower pace of growth is persisting,” he told reporters.
The gloomy official statement from the bank referred to the job market as “weaker than anticipated” instead of the previous term “improving gradually.” Bernanke, in his second-ever official press conference, seemed to have a bit of trouble striking a genuinely positive note:
“Maybe some of the headwinds that are concerning us, like the weakness in the financial sector, problems in the housing sector — some may be stronger and more persistent than we thought,” he said.
Bernanke described the debt crisis in Greece as a “very difficult situation.” He said that if Greece defaulted on its debt, the impact would go beyond Europe and threaten the global economy.
In answer to another question, Bernanke said the impact on U.S. financial institutions would likely be “very small.” But he said a spiraling Greek debt crisis that roiled financial markets would pose more severe threats.