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Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson both acknowledged problems in the U.S. economy Thursday, but both said they believe the nation will avoid falling into recession.
Bernanke indicated that policy makers are prepared to lower interest rates further as the economy continues to deteriorate.
The Fed "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks,'' Bernanke told the Senate Banking Committee in <?xml:namespace prefix = st1 />Washington yesterday. "A significant worsening in financial conditions or in credit availability would certainly be a warning bell that we need to take further action.''