03-04-2008
US Federal Reserve head warns of contraction
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
Ben Bernanke, head of the US Federal Reserve, has issued a warning to confirm a possible contraction of gross domestic product (GDP) in the US.
According to comments by Mr Bernanke, there is a risk that over the first two quarters of 2008, the country's GDP levels could contract rather than grow.
Mr Bernanke also noted, when questioned, that a recession in the US was a possibility.
"Financial markets remain under considerable stress," said Mr Bernanke.
"It now appears likely that real GDP will not grow much, if at all, over the first half of 2008 and could even contract slightly."
The recent comments were made by Mr Bernanke in front of Congress.
Under the accepted definition of what constitutes a period of recession, a country is identified as having entered into a recessionary period when GDP levels have declined for at least two consecutive quarters.