Fed Will Help If Economy Craters: Bernanke
But it's unclear what action it would take
By Newser Editors and Wire Services
Posted Jun 7, 2012 11:32 AM CDT
Federal Reserve Board Chairman Ben Bernanke arrives on Capitol Hill in Washington, Thursday, June 7, 2012, to testify before the Joint Economic Committee about the health of nation's economy, the slumping...   (J. Scott Applewhite)

(Newser) – The Federal Reserve is prepared to take further steps to lift the economy if it weakens, Ben Bernanke said today—but he didn't signal any imminent action in testimony before a congressional panel. Bernanke said the European debt crisis poses significant risks to US financial markets. He noted that US unemployment remains high and the outlook for inflation subdued.

"As always, the Federal Reserve remains prepared to take action as needed to protect the US financial system and economy in the event that financial stresses escalate," Bernanke told the Joint Economic Committee. Most economists don't expect further moves at the Fed's next policy meeting June 19-20, despite some signals from other Fed members in recent days. They note that long-term interest rates have already touched record lows. Even if rates decline further, analysts say they might have little effect on the economy. Today's testimony didn't "tip Bernanke's hand" as to his plans, analysts say.