This credit crunch worse than '90s version: Fed official
By Greg Robb
Last update: 12:21 p.m. EDT Sept. 3, 2008

WASHINGTON (MarketWatch) -- The "headwinds" facing the economy are much stronger than those experienced during the last credit crunch in the early 1990s, said Eric Rosengren, the president of the Boston Federal Reserve Bank on Wednesday. This credit crunch is likely to hit consumers as well as businesses. The last crunch primarily impacted small businesses, he said. It may push the unemployment rate up to 6%, with more than 2 million people losing their jobs since the financial turmoil began last summer, Rosengren said in a speech in New Hampshire. The Fed's benchmark interest rate, currently at 2%, is not too low or inflationary, he said. Countering suggestions by some Fed officials that the central bank must push rates up sooner rather than later, Rosengren said the low rates help offset some of the negative effects of the lack of credit.