Federal Reserve Chairman Ben Bernanke warned on Tuesday of threats to the economic recovery and the nation being at risk of slipping back into a recession. Bernanke did offer a positive outlook for the housing market, however: He acknowledged the housing market is showing signs of improving, but he said that it it is contributing less to economic growth than it has in past recoveries.
Some analysts predict that before the end of the year the Fed will act to …
buy up more Treasury bonds, which could lower long-term interest rates even further from record lows.
Bernanke pushed lawmakers to reach a compromise on tax increases and spending cuts that are to take effect by the end of the year. He said that if lawmakers don’t approve the tax increases and spending cuts by then, it’s likely a “shallow recession would occur early next year.”
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