No rate hike on sight as Fed chief says recovery in US 'fragile'
08 Dec 2009
The US economy is likely to expand moderately in 2010, Federal Reserve chairman Ben S Bernanke said yesterday.
''Economic forecasts are subject to great uncertainty, but my guess is that we will continue to see modest economic growth next year," Bernanke told the Economic Club of Washington in a speech.
This would be ''sufficient to bring down the unemployment rate, but at a slower pace than we would like, he said adding that the economy confronts ''formidable headwinds'', including a weak job market, cautious consumers and tight credit.
Unemployment could stay ''elevated'', although inflation is likely to remain "subdued", he said.
Interest rates were likely to stay low for ''an extended period'', he added.
Bernanke's remarks dampened speculation that the central bank could begin lifting short-term rates from near zero.
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