Bernanke Leaves Investors Disappointed
Author: Michael Casey</br></br>NEW YORK--Federal Reserve Chairman Ben Bernanke left investors disappointed after he painted a gloomy picture of the U.S. economy but gave no indication the Fed is preparing any new stimulus measures.</br></br>Stocks and other assets with greater exposure to risk fell, while U.S. Treasurys and the dollar gained as Mr. Bernanke delivered his much-awaited semiannual address to Congress, describing the economic outlook as "unusually uncertain."</br></br>The Fed chairman reiterated the Fed's official view that interest rates would stay near zero for "an extended period." But although he stressed that it is "prepared to take further policy actions as needed to foster a return to full utilization of our nation's productive potential," he offered no new policy options for reversing the recent slowdown in the U.S. economic recovery.</br></br>In answer to senators' questions, Mr. Bernanke later explored the possibility of further stimulus measures "if the recovery seems to be faltering," but in failing to address this in his prepared remarks he left investors disappointed. In the lead-up to his appearance, there had been growing speculation that the Fed chairman might signal the central bank's willingness to cease paying interest on the reserves it holds on banks' behalf, a move that would be an incentive for banks to lend that money to customers. Indeed, Mr. Bernanke mentioned that idea, along with other prospects for added stimulus in the question-and-answer session, although he said that for now the Fed was still intent on gauging the strength of the recovery.