Federal Reserve Chairman Warns Congress About Economic Slowdown [AUDIO/VIDEO]
The Chairman of the Federal Reserve told Congress what most of us already know. The economy is still in trouble.
Ben Bernanke told Congress the economy has weakened. He says job growth has slumped, manufacturing has weakened and consumers have slowed their spending. "Although declines in energy prices are now providing some support to consumers' purchasing power, households remain concerned about their employment and income prospects and their overall level of confidence remains relatively low," Bernanke said in his testimony.
Bernanke says the Fed's ready to take more action to bolster growth. Even if the Fed announces another round of bond purchases, some economists question how much that would help. They note that mortgage rates and other key interest rates are already at record-low levels.
Rider University economist Maury Randall says the fix is beyond the Federal Reserve's control. He says there are things that can be done, but those who are supposed to be doing those things are not.
Randall says Congress and the President must agree on extending tax cuts due to expire at year's end and cut through some of the business-stifling red tape. He says without those fixes, we could have problems.
Bernanke has noted that the Fed can do only so much to help the economy. In his testimony, he pointed to the Congressional Budget Office's warning that the economy could suffer a shallow recession next year if Congress fails to reach a budget deal that would avert steep tax hikes and across-the-board spending cuts.