Bad News Ben

Uh oh. Bloomberg thinks Ben mighta fucked up (08.07.06):

"Federal Reserve Chairman Ben S. Bernanke may have waited too long to step off what he's called the 'escalator' of steadily rising interest rates. While Bernanke and his colleagues may leave their interest-rate target unchanged tomorrow, the U.S. economy might already be headed for a steeper slowdown than the Fed wants." Bernanke's Ride on Interest Rate 'Escalator' Risks Recession

How's that, you may ask? "Housing, consumer spending on durable goods and corporate outlays on equipment all contracted in tandem last quarter for the first time in 15 years as interest rates and oil prices rose." "And there may be more slowing to come because the nation hasn't yet felt the full effect of the Fed's 17 previous rate increases. Until now, globalization and financial innovation have allowed companies and consumers to dodge the impact while the Fed continued tightening. That leaves much of the force of the central bank's actions still in the pipeline." "'They've already gone too far,' says Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York and a former Fed official. He sees economic growth slowing to 1.5 percent in the third quarter from 2.5 percent in the second and 5.6 percent in the first." "Growth that slow would leave the economy more vulnerable to being knocked into a recession by a jump in oil prices or some other shock. Most economists aren't that pessimistic. They see growth of 2.8 percent in the second half, according to the median forecast of 51 economists surveyed by Bloomberg in July." So according to the optimistic economists, instead of piss poor, growth will just be anemic. Whew! For a second there, we wuz kinda worried.