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Monday, September 17, 2007

Federal Reserve Chairman's Dilemma

September 17 2007
Housing is in the pits. The credit markets are in turmoil. With the loss of 4,000 jobs in August, the labor market has slowed to a crawl. And Wall Street is clamoring for Fed Chairman Ben S. Bernanke to cut interest rates aggressively to pump up the economy. But investors, homeowners, and workers may be disappointed if they are hoping for more than one, or perhaps two, small cuts in the benchmark federal funds rate. In his defining moment as Fed chief, Bernanke is picking his way through an immensely complicated and uncharted economic landscape. Unless the bottom suddenly falls out of the job market or some other economic calamity unfolds, he's likely to show great restraint in the coming months.


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