Federal Reserve Chairman Ben Bernanke on Tuesday offered a gloomy view of the economy's prospects, but provided few concrete clues on whether the U.S. central bank was moving closer to a fresh round of monetary stimulus. Bernanke told the Senate Banking Committee the economic recovery was being held back by anxiety over Europe’s debt crisis and the path of U.S. fiscal policy, and he expressed unease over a stagnant jobs market. The Fed chairman told lawmakers the central bank was considering a range of tools it could employ to help the economy but he hewed closely to the message of watchful waiting that the central bank’s policy panel delivered in June. “Reflecting its concerns about the slow pace of progress in reducing unemployment and the downside risks to economic growth, the committee made clear at its June meeting that it is prepared to take further action,” Bernanke said in his testimony on the Fed’s semi-annual monetary policy report. Some investors had hoped the Fed chief would signal that the central bank was moving close to a third round of bond purchases — or QE3 in market parlance — to support the economy. Prices for U.S. stocks initially fell on disappointment but clawed back to close up on the day on better-than-expected profit forecasts from Coca-Cola and Goldman Sachs. Prices for U.S. government debt fell. ... Continue to read.
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