The chairman Federal Reserve Board, Ben Bernanke, said more interest-rate cuts “may well be necessary” after 1 percentage point of reductions since September to buttress economic growth. “We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” Mr. Bernanke said yesterday in his first speech on the economy since the Fed’s December 11 meeting. Recent figures suggested the outlook for “2008 has worsened and the downside risks to growth have become more pronounced,” he said. The comments increased speculation that the Federal Open Market Committee will cut its benchmark rate by half a percentage point, to 3.75%, this month. Wall Street analysts say the odds of a recession have increased after a report last week showed a jump in unemployment.

“A number of factors, including higher oil prices, lower equity prices, and softening home values, seem likely to weigh on consumer spending” this year, Mr. Bernanke said in remarks to the Women in Housing and Finance and Exchequer Club in Washington.

The Fed isn’t forecasting a recession, the Fed chief said. “We are forecasting slow growth, but there are downside risks,” he added. “It is important to take substantive action against those risks.”

“From the tone of the speech, a 50-basis point cut seems likely,” a former economic adviser to President Bush and ex-Fed governor, Lawrence Lindsey, said. Though it’s “unlikely” the America is in recession, Mr. Bernanke “is quite right to take precautionary measures right now,” he said.

The dollar extended declines and shorter-dated Treasuries rallied after Mr. Bernanke’s remarks, while stocks initially rose before dropping. Yields on two-year Treasuries fell to 2.65% at 2:13 p.m. in New York, from 2.72% late yesterday. The dollar dropped 0.9% to $1.48 per euro.