Chairman Ben Bernanke says that the Federal Reserve is prepared to take further steps if the U.S. economy weakens, but he isn’t signaling that any action is imminent. According to Bernanke, the European debt crisis poses significant risks to the U.S. financial markets. And he notes that U.S. unemployment remains high and the outlook for inflation subdued.
Bernanke’s comments in testimony to a congressional panel comes one day after three Fed officials suggested that the central bank may need to do more to help the economy.
Most economists don’t expect further moves at the Fed’s next policy meeting June 19-20. They note that long-term interest rates have already touched record lows. Even if rates do decline further, analysts say they might have little effect on the economy.