WASHINGTON — Federal Reserve Chairman Ben S. Bernanke said Thursday that the Fed remains relatively optimistic about the health of the domestic economy, and he gave no indication that the Fed is planning new measures to boost growth.
The pace of growth remains lackluster at best, and Mr. Bernanke said widespread pessimism continues to restrain spending, amid worries about the stability of the European financial system and the chaotic state of domestic fiscal policy.
But his overall assessment was little changed from his last public remarks on the state of the economy more than a month ago. “Economic growth appears poised to continue at a moderate pace of over coming quarters, supported in part by accommodative monetary policy,” he said in prepared remarks for the Congressional Joint Economic Committee.
The Fed chairman said that its existing efforts to support the economy remain necessary. The central bank has held short-term interest rates near zero since late 2008, and it has said that it plans to maintain that policy until late 2014 at least. It also has purchased more than $2 trillion in Treasury securities and mortgage securities to further reduce borrowing costs for businesses and consumers.
Mr. Bernanke also offered the standard affirmation that the Fed “remains prepared to take action as needed to protect the U.S. financial system and economy.”
But his remarks offered little comfort to investors who want the Fed to expand its efforts in two weeks, when its policy-making committee next meets.
Mr. Bernanke said that the significance of a recent downturn in reported job growth remained unclear and did not necessarily indicate that the economic recovery was decelerating. It was also possible, he said, that the higher pace of reported job growth earlier in the year had been exaggerated.
However, he noted, if job creation is slowing, “more rapid gains in economic activity will be required to achieve significant further improvement.” Such a conclusion could well lead the Fed to take additional action.
Several other members of the committee also have indicated in recent days that they do not yet see sufficient reason for the Fed to take additional action, in part because the economic outlook is unusually murky.
“These are highly uncertain times, and our crystal balls are much cloudier than usual,” John Williams, president of the Federal Reserve Bank of San Francisco, said Wednesday.