The turmoil in credit markets poses a "significant threat'' to an already slowing U.S. economy, Federal Reserve Chairman Ben Bernanke said Wednesday, suggesting an openness to further interest-rate cuts.
In a speech to the Economic Club of New York, Bernanke said it will take some time to restore normal flows of credit and he pledged the U.S. central bank would continue to act aggressively to fight the crisis.
Janet Yellen, President of the San Francisco Fed, was especially blunt, saying the U.S. economy appeared to be in a recession and would likely contract in the fourth quarter after near-flat growth in the third.
"Rate cuts are by no means a panacea, but they do at least partially offset the tightening of financial conditions due to higher spreads, reflecting heightened credit and liquidity risk and a marked increase in general risk aversion," she said.
And that leads to our Fast Money Reader Poll. Should the Fed cut interest rates, again?
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CNBC.com with wires