Key Rate May Be Cut to Zero

Summary


AUSTIN, Texas -- Federal Reserve Chairman Ben Bernanke said on Monday that the nation's economic weakness will persist for some time, even if the government's efforts to boost lending help restore the credit markets to normal.

The economy "will probably remain weak for a time," even if the credit crisis eases, Bernanke said Monday in a speech in Austin. While the Fed can't push interest rates below zero, "the second arrow in the Federal Reserve's quiver -- the provision of liquidity - - remains effective," he said.

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Key Rate May Be Cut to Zero

Bernanke's comments pushed Treasury yields to record lows. Bernanke has created...

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