By Jason Theodorou
Chairman of the US Federal Reserve Ben Bernanke has said that the country's economy faces an 'unusually uncertain' future. He cited record low interest rates as a necessary step for supporting economic recovery, together with new policy actions.
Speaking to the US Congress in his semi-annual testimony on the economy, Mr. Bernanke said that growth is progressing at a 'moderate pace' and he did not suggest that the US would enter another recession, saying that 'rising demand from households and businesses' would help to sustain economic growth.
Interest rates have been held at between a range of 0% and 0.25%, a move designed to promote spending and loans. Mr. Bernanke said that interest rates would be held at this level for an 'extended period', and also said that he expected inflation to remain 'subdued over the next several years'.
High unemployment combined with slower manufacturing rates have created concerns that the recovery is fragile. Mr. Bernanke said that the Fed 'remained prepared' to take action if the recovery continued on this trend, but there was no immediate action to be taken. Mr. Bernanke said: 'If the recovery seems to be faltering, then we will at least need to review our options'.
The comments did not go down well with investors, with the Dow Jones Industrial Average dipping by 1% and the FTSE 100 slipping to a low of 5180.93 in early morning trading.
Join us on