Friday, August 26, 2011

Bernanke proposes no new steps to boost economy, begins building ark and gathering two of every animal

Federal Reserve Chairman Ben Bernanke signaled Friday that Congress must do more to promote growth, or risk delaying the economy's return to full health.

Bernanke proposed no new steps by the Fed to boost the economy. But at a time when Congress has been focused on shrinking long-run budget deficits, he warned lawmakers not to "disregard the fragility of the current economic recovery."

Bernanke, who spoke at an annual economic conference in Jackson Hole, said that record-low interest rates will promote growth over time.

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 after the speech was released but then recovered. The Dow rose slightly in midmorning trading.

Bernanke left open the possibility that the Fed will take further steps to strengthen the economy. He said its September meeting will be held over two days instead of just one to allow for a "fuller discussion" and that the Fed "is prepared to employ its tools as appropriate to promote a stronger economic recovery." more