Fed Chairman Says Rate Cut Likely

Federal Reserve Board Chairman Ben Bernanke said the Fed would cut interest rates as needed to prevent housing and credit problems from plunging the country into a recession, the Associated Press reported.

Bernanke said Thursday that the Fed was prepared to act aggressively to bolster a weakening economy, AP said.

The Fed’s most recent cut of the key interest rate that banks charge each other left the rate at 4.25%.

The Fed next meets on Jan. 29-30, when some economists predict a half-point reduction, AP reported.

The Fed cut the benchmark interest rate by a quarter-point in September and December of last year, and a half-point in October.