WASHINGTON--Federal Reserve Chairman Ben Bernanke submitted the same
testimony for a Wednesday hearing with the House Financial Services
Committee as he did one day earlier in the Senate, delivering a dour
economic outlook and providing no new clues about whether the central
bank plans to take further action to support the recovery.
The Fed chief's testimony was posted publicly on the House committee's
website Tuesday afternoon.
Mr. Bernanke warned in his prepared remarks that economic activity
appeared to be slowing this year and that the 8.2% unemployment rate
was coming down at a "frustratingly slow" pace. The Fed chief also
predicted further weakness ahead for business investment--a departure
from Fed officials' belief in June that it was still advancing.
Mr. Bernanke didn't offer clues as to whether Fed officials are
leaning toward launching a third round of bond-buying, also known as
quantitative easing, at its next policy meeting July 31-Aug. 1. But
speaking before the Senate Banking Committee on Tuesday, he mapped out
some of the central bank's other options if it does decide to do more
to boost economic growth.
The Fed could put off to beyond 2014 its plan to avoid raising
short-term interest rates, Mr. Bernanke said. It could also cut the
0.25% interest rate it pays to banks on the approximately $1.6
trillion in excess reserves they keep parked at the U.S. central bank.
The European Central Bank took a similar step recently.
The Fed chairman hinted at another option--the possibility of getting
credit to banks through the Fed's discount window, which normally is
used only for emergencies.
Mr. Bernanke is expected to begin his testimony at 10 a.m. EDT Wednesday.
Write to Kristina Peterson at kristina.peterson@dowjones.com
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(END) Dow Jones Newswires
July 17, 2012 17:35 ET (21:35 GMT)
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