Fed Chairman Bernanke says they are ready to decrease rates as needed. This comment has been made in a speech to a housing and economic forum in Washington, DC. He analyzed the causes for the housing slowdown and the credit crunch and the some moves by the Federal Reserve to stabilize the situation, including lowering interest rate three times last year to a two year low of 4.25 percent and bringing in a term auction facility (TAF), successfully utilizing $40 billion to eligible banks in December.
Market expects rates to be decreased by a half-point, at its next meeting at the end of the month, despite the fact that no numbers have been mentioned by Bernanke. Some believe that the decrease will be only by 25 basis points, as there are concerns about growing inflation.