Bernanke warned that international pressures, such as the eurozone crisis, posed risks for the US economy. However, he gave few hints of any change to policy soon.
His tone stood in contrast to remarks made in a speech late on Wednesday by his vice chairman, who pointed to a list of weaknesses in the US economy and appeared to lay out the case for further central bank support. Janet Yellen‘s list included continuing housing problems and a weak jobs market.
Bernanke told Congress the Fed was closely monitoring “significant risks” to the US from Europe’s debt crisis, but said, “Despite economic difficulties in Europe, the demand for US exports has held up well”.
On Wednesday, the Fed, concluded that overall economic activity had quickened in the period between early April to late May. However, there have been worries about the weakness of the US recovery, underlined by news last week of lower-than-expected jobs growth.
He said employment growth was one of the key issues he and the rest of the Fed‘s Open Markets’ Committee (FOMC), which meets regularly to decide on monetary policy, would be looking at in the next meeting.
Chairman Bernanke did warn that government tax policy could derail economic growth, pointing to so-called “fiscal cliff” legislation that could force a steep cut in government spending alongside higher taxes; a move some economists say could send the country back to recession.
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Park Sae-jin
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