WASHINGTON, July 17 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke left out specifics Tuesday but said the central bank was prepared to take further steps to stimulate the economy.
The remarks on extra stimulus were brief and generic, but turned a slump in equity markets around, anyway, as stocks on three major Wall Street indexes turned from declines to advances in late-morning trading.
Bernanke noted the economic recovery has slowed to a crawl since early in the year. "The U.S. economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year," he said to members of the Senate Banking Committee in remarks prepared for a semi-annual report.
The economy had added jobs at a rate of 200,000 per month in the later part of 2011 and early in the year, but that "shrank to 75,000 per month during the second quarter," he said.
Bernanke had been expected to tell lawmakers the Fed was poised to embrace new stimulus measures without saying when, economists said in advance of the chairman's testimony.
But the chairman only went as far as to say, "Reflecting its concerns about the slow pace of progress in reducing unemployment and the downside risks to the economic outlook, the [Fed's] Open Market Committee made clear at its June meeting that it is prepared to take further action as appropriate to promote a stronger economic recovery."
Minutes of the Fed's June meeting, released last week, indicated "a few" of the 12 officials who vote on Fed policy thought quantitative easing and other stimulus measures "likely would be necessary to promote satisfactory growth." Several others said they would consider such steps only if economic conditions deteriorated, the minutes indicated.
The Fed announced after its June 19-20 meeting it would continue until year's end an effort to reduce business and consumer borrowing costs by rearranging its portfolio.