Bernanke says Fed will act to lift growth
Source: Agencies |
July 18, 2012, Wednesday
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Print Edition
Print Edition
THE US economy has weakened and the Federal Reserve is ready to take further action to bolster growth if conditions don't improve, Chairman Ben Bernanke told a congressional panel yesterday. But Bernanke provided no clues about what steps the Fed might take or whether any action was imminent.
Investors were hoping Bernanke would signal that the Fed was ready to launch another round of bond purchases, which aim to drive down long-term interest rates and encourage more borrowing and spending.
Bernanke is delivering his mid-year report on the economy to the Senate Banking Committee. He'll testify today before the House Financial Services Committee.
His report comes as job growth has slumped, manufacturing has weakened and consumers have grown more cautious about spending.
Bernanke acknowledged those developments in his testimony. He noted the economy, after growing at an annual rate of 2.5 percent in the second half of 2011, slowed to about 2 percent in the first three months of this year and likely slowed again in the April-June period.
The economy will likely continue to expand moderately, he said. But meager growth would slow further if Europe's debt crisis worsens or if Congress doesn't address an impending budget crisis by year's end.
"Although declines in energy prices are now providing some support to consumers' purchasing power, households remain concerned about their employment and income prospects and their overall level of confidence remains relatively low," Bernanke said in his testimony.
Investors were hoping Bernanke would signal that the Fed was ready to launch another round of bond purchases, which aim to drive down long-term interest rates and encourage more borrowing and spending.
Bernanke is delivering his mid-year report on the economy to the Senate Banking Committee. He'll testify today before the House Financial Services Committee.
His report comes as job growth has slumped, manufacturing has weakened and consumers have grown more cautious about spending.
Bernanke acknowledged those developments in his testimony. He noted the economy, after growing at an annual rate of 2.5 percent in the second half of 2011, slowed to about 2 percent in the first three months of this year and likely slowed again in the April-June period.
The economy will likely continue to expand moderately, he said. But meager growth would slow further if Europe's debt crisis worsens or if Congress doesn't address an impending budget crisis by year's end.
"Although declines in energy prices are now providing some support to consumers' purchasing power, households remain concerned about their employment and income prospects and their overall level of confidence remains relatively low," Bernanke said in his testimony.
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