Business, Economics and Jobs

Bernanke gloomy on economy to Congress, mum on stimulus


US Federal Reserve Board Chairman Ben Bernanke testifies at a congressional hearing on Capitol Hill on February 2, 2012.


Jewel Samad

Federal Reserve Chairman Ben Bernanke gave a gloomy outlook of the US economy Tuesday, but was mum on whether any further stimulus efforts were in the works.

Europe's debt crisis and US fiscal policy are threatening what little recovery has occurred, he told the Senate Banking Committee in his semi-annual report to Congress, according to CNN.

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Any economic growth has already slowed, and unemployment is unlikely to fall below 7 percent in the next year, Bernanke said.

"The reduction in the unemployment rate seems likely to be frustratingly slow," he said.

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Bernanke's tone was much more downbeat than last month, when he told lawmakers and reporters he expected moderate growth in the coming year, USA Today reported.

But while he said the central bank was prepared to take additional measures to support the economic recovery, he offered no hints about when any further action was coming, according to the Los Angeles Times.

Many economists believe the Fed is likely to move by year's end to buy more Treasury bonds in an effort to lower long-term interest rates, USA Today reported.

US stock prices initially fell on disappointment following Bernanke's comments but moved back into positive territory by midday, Reuters reported.