US economy facing ‘numerous difficulties’, says Fed chief

July 15th, 2008 - 10:06 pm ICT by IANS  

Washington, July 15 (Xinhua) The US economy continues to face “numerous difficulties”, including persistent strains in financial markets, declining house prices and rising prices of oil and food, Federal Reserve chairman Ben Bernanke said Tuesday. “The US economy and financial system have confronted some significant challenges thus far in 2008,” said Bernanke in a written testimony to the Senate Banking Committee.

“The effects of the housing contraction and of the financial headwinds on spending and economic activity have been compounded by rapid increases in the prices of energy and other commodities, which have sapped household purchasing power even as they have boosted inflation,” he said.

“Accurately assessing and appropriately balancing the risks to the outlook for growth and inflation is a significant challenge for monetary policy-makers,” said the central bank chief.

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