CNBC: Bernanke Offers No Hint Fed Is Planning Further Easing
Federal Reserve Chairman Ben Bernanke offered no new hints Tuesday that the central bank is planning more easing, but he repeated his pledge that the Fed “is prepared to take further action as appropriate to promote a stronger economic recovery.”
In prepared testimony before the Senate Banking Committee, Bernanke said economic uncertainty is increasing, mainly due to the European debt crisis and the looming “Fiscal Cliff” in the US.
“Risks to economic growth have increased,” he said, and “Europe’s financial markets and economy remain under significant stress.”
“Reduction in unemployment likely to be frustratingly slow,” Bernanke said, but he said there were “modest signs of improvement in housing.”
His testimony comes as job growth has slumped, homebuilder sentiment has weakened and consumers have grown more cautious about spending.
Investors hoped Bernanke would signal another round of bond purchases, meant to push down long-term interest rates and encourage more borrowing and spending.
The first two rounds of the Fed's bond purchases triggered powerful rallies in the U.S. stock market.
Minutes of the Fed's June meeting show that Fed officials were divided over whether the economy needs help now.
Since then, the government has reported that job growth slowed sharply in the April-June quarter — to 75,000 a month from 226,000 a month from January through March. The unemployment rate stayed at 8.2 percent in last month
Retail sales fell in June for the third straight month, the government reported.
Bernanke will give testify again on Wednesday to the House Financial Services Committee.
