WASHINGTON - The economy is sinking deeper into hard times. The Federal Reserve is warning that the problems could last well into next year.
With no real answer in how to deal with the struggling auto industry, uncertainty clouds the markets here at home and overseas.
Click play to hear Pat Robertson's analysis following CBN News Correspondent John Jessup's report.
The Fed's sobering assessment of the economy had an immediate impact on the markets.
For the first time in more than five years, the Dow Jones started the day below 8,000 after Wednesday's dramatic 400-point drop.
The slide rippled through Europe and Asia, where oil prices fell below $53 a barrel - almost at a two-year low.
"The message of the minute from the Fed today really hit the market like a slap in the face," said Jeffries Chief Market Strategist Art Hogan. "They stopped short of using the word recession, but they certainly didn't stop short of describing a recession."
The Federal Reserve warned that the country's economic hardships will continue well into next year, suggesting that more interest rate cuts may be needed as unemployment will likely rise.
Big Three Hit Brick Wall
The negative forecast came as the path to bail out the Big Three auto-makers appeared to have hit a dead end here in Washington.
Congress sent Detroit back home without the $25 billion loan they asked for.
But lawmakers from auto-states are working on an alternative plan to keep the companies running on enough cash to get them into next year.
"Many people saying that we created these problems ourselves and that it's just a Michigan problem. But it really isn't just a Michigan problem. It will resonate in a very negative way throughout our national economy," said Rep. Candice Miller.
Workers Ponder Their Fate
Meanwhile, industry workers are left wondering about their future.
"I got a house payment. I got kids. I got stuff I got to take care of. You take away this, where am I going to go?" lamented Ford worker Ed Hegarty.
"If I lose my job, the restaurant down the street is going to lose a customer - or the gas station. It's a circle and everyone needs to see that," said Ford worker Marcus Perry.
And the economy may face another concern on the horizon: deflation.
Last month, consumer prices fell one percent - the most in 60 years following a record drop in wholesale prices. It's another major problem for markets to worry about and not something they need, with the Dow already down nearly 40 percent this year.