With financial markets still tumbling, the Federal Reserve is signaling that it might cut interest rates after a series of bold steps by federal regulators failed to stem the slide. Neither presidential candidate offered a solution.

"The outlook for economic growth has worsened," Fed Chairman Ben Bernanke told a gathering of business economists.

The slumping economy was underscored by a 1,400-point, or 13 percent, drop in the Dow Jones industrials over the past five trading days.

The crisis threatening all Americans, and investors around the world, was only mentioned in passing by the presidential candidates in a debate Tuesday night.

Republican John McCain called for a program to stem foreclosures by requiring the federal government to renegotiate the mortgages of individual homeowners and make them more affordable, a proposal he has been promoting on the campaign trail.

Democrat Barack Obama claimed the crisis was the "final verdict on the failed economic policies of the last eight years" that President Bush pursued and were "supported by Sen. McCain," a charge he has made before.

Earlier, Bush again sought to strike a reassuring tone and said the nation would make it through an economy blighted by job losses, record foreclosures and shriveled retirement savings. Congress' top budget analyst estimated Tuesday that Americans' retirement plans have lost as much as $2 trillion in 15 months.

With hundreds of billions of U.S. tax dollars already on the line, Bernanke defended the most aggressive federal intervention in the financial system since the 1930s and said regulators are looking for other innovative ways to try to stabilize markets.

"So long as financial conditions warrant, we will continue to look for ways to reduce funding pressures in key markets," he told the National Association for Business Economics on Tuesday, also opening the door wider to an interest rate cut on or before the Fed's Oct. 28-29 meeting.

The key short-term rate under its control, the federal funds rate, is now at 2 percent. Some market watchers suggest the Fed cut could be as large as a full percentage point. Continued...