Tuesday, June 5, 2007

The Fed Chairman Admits Housing Is a Problem for Economic Growth

From CNN.Money.com

Elevated levels of inflation excluding food and energy may not recede as weakness in the housing sector is likely to restrain economic growth for longer than expected, Federal Reserve Chairman Ben Bernanke said Tuesday.

"Although core inflation seems likely to moderate gradually over time, the risks to this forecast remain to the upside," Bernanke said in remarks to a monetary policy conference in Cape Town, South Africa.

"The adjustment in the housing sector is still ongoing, and the slowdown in residential construction now appears likely to remain a drag on economic growth for somewhat longer than previously expected," he said.

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