- Gentlemen, start your drones: Judge’s ruling opens door for commercial use
- Soldier who hid, bragged about not saluting flag to be punished — in secret
- ‘Maverick’ of the seas: ‘Top Gun’ school for U.S. ship officers to launch
- Putin declares Sochi Paralympics open amid Ukrainian protest
- ‘In Jesus name, we pray’ sparks ire at Ohio council meeting
- Navy’s first laser weapon ready for prime time; drone killer to deploy this summer
- Billionaire backer: Rick Santorum ‘needs to be heard’ in 2016
- Obamacare fallout: 49 percent pessimistic; 45 percent ‘scared’
- DHS accused of holding U.S. citizen at airport, using emails to pry into her sex life
- Seattle socialist: Minimum-wage discussion skewed by ‘right-wing’ GAO analysis
Bernanke: Fed’s efforts have helped the economy
WASHINGTON (AP) — Federal Reserve Chairman Ben S. Bernanke told lawmakers Wednesday that the Fed's efforts to bolster growth have helped lift the U.S. economy out of the Great Recession. But he acknowledged that growth remains weak and the Fed can only do so much.
"I don't think it is the case that there has been no progress. The recovery has been slower than we like, but clearly we have made progress," Mr. Bernanke told the House Financial Services Committee.
Mr. Bernanke was on the Hill to deliver his twice-a-year report to Congress on the state of the economy. But he spent part of the hearing defending the Fed's previous two rounds of large-scale bond purchases against Republican criticism.
The economy has weakened since the start of the year, and Mr. Bernanke said the Fed is prepared to take further action if unemployment stays high. He didn't specify what steps the Fed might take or whether any action was imminent.
His comments were similar to those he made Tuesday to the Senate Banking Committee.
Many economists interpreted the remarks to mean the Fed likely will launch a third round of bond purchases, perhaps in the fall. That's because few expect the unemployment rate, which was 8.2 percent last month, to fall much further by then.
The bond purchases seek to lower long-term interest rates and encourage more borrowing and spending.
Mr. Bernanke noted that the economy, after growing at a 2.5 percent annual rate in the second half of 2011, slowed to roughly 2 percent from January through March. It likely weakened further in the April-June period.
Manufacturing has slowed. Consumers are spending less. And job growth has slumped to an average of 75,000 a month in the April-June quarter from 226,000 a month from January through March.
But Republicans on the panel questioned the Fed's use of large-scale asset purchases to lower long-term interest rates. They say the bond purchases have increased the risk of inflation without providing much help to the slumping economy.
"We have anemic growth, probably half of what it should be by historic standards," said Rep. Jeb Hensarling, Texas Republican. Mr. Hensarling questioned what another round of bond purchases would do.
Mr. Bernanke said the first effort in the middle of 2009 helped lift the economy out of the recession, which ended in June 2009.
The second, launched in November 2010, kept the economy from suffering a bout of deflation, he said. Deflation is a prolonged period of falling prices, which the United States hasn't seen since the Great Depression.
"I think the previous efforts did have productive effects," he said.
TWT Video Picks
Taxpayers must pay the freight for over-budget train projects
- CPAC 2014: Rand Paul urges conservatives to fight for liberty
- Putin has transformed Russian army into a lean, mean fighting machine
- Kim Jong-un calls for execution of 33 Christians
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- Soldier who hid to avoid saluting the flag to be punished in secret; Army won't release details
- EDITORIAL: Connecticut revolts against gun controls that could criminalize 300,000
- Bill Clinton poses for photo with Bunny Ranch prostitutes
- High schooler suing parents for money shot down by judge
- MILLER: Donald Trump says hes a Tea Party member
- Couple from Ethiopia begin new life in Dubuque
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again