Ben Bernanke, Federal Reserve Chairman, Proposes No New Steps To Help U.S. Economy
JACKSON HOLE, Wyo. (AP) -- Chairman Ben Bernanke is proposing no new steps by the Federal Reserve to boost the economy while hinting that Congress may need to act to stimulate hiring and growth.
Bernanke said Friday that while record-low interest rates will promote growth over time, the weak economy requires further help in the short run. He is speaking at an annual economic conference in Jackson Hole, Wyo.
His speech follows news that the economy grew at an annual rate of just 1 percent this spring and 0.7 percent for the first six months of the year. Only slightly healthier expansion is foreseen for the second half.
Bernanke said he's optimistic that the job market and the economy will return to full health in the long run.
Stocks fell lower after the speech was released. The Dow had been down about 78 points, about 0.7 percent, shortly before 10 a.m. The loss quickly extended to 180 points.
Bernanke's speech comes at a critical moment for the economy. Some economists worry that another recession might be near.
A big reason is that consumer spending has slowed. Home prices are depressed. Workers' pay is barely rising. Household debt loads remain high.
All that, compounded by Europe's debt crisis, has spooked the stock markets and unnerved consumers. Congress is focused on shrinking deficits and seems unlikely to back any new spending to try to energize the economy.
That's why many have looked with anticipation to the Fed to do more. The central bank has already kept short-term interest rates near zero for 2 1/2 years. And earlier this month, it said it would keep them there through mid-2013.