"Federal Reserve Chairman Ben Bernanke told Congress Thursday the economy is deteriorating and signaled a readiness to keep on lowering a key interest rate to shore things up.

Bernanke also told the Senate Banking Committee that the one-two punch of housing and credit crises has greatly strained the economy. And he forecast sluggish growth in the near term. Bernanke also noted that hiring has slowed and that people are likely to tighten their belts further because of high energy prices and plummeting home values."

I have heard speculation as to why the Federal Reserve is taking so many unprecedented steps to shore up the economy -- some say that it is purely political, that the Bank does not want a recession right now just before an election; others say that these actions are a result of a fear that the economy is about to tip into a major recession without these steps; whereas still others point to Chairman Bernanke's previous speeches and articles where he outlined the very steps that he would take should it become necessary (dropping money from helicopters) and that he is simply following through on those creative steps to prevent recession. At this point, it is anyone's guess as to why the Fed is taking these actions, but the fact remains that the Federal Reserve is literally pulling out all the stops to inject money into the economy and encourage banks to continue to lend money to qualified borrowers.

Here is a link to the whole article: http://www.kansas.com/business/updates/story/311272.html

Michael