“Federal Reserve Chairman Ben Bernanke called the economic recovery “disappointingly slow” but outlined no further stimulative measures, in a speech delivered at the Economic Club in New York.
Rather than meet expectations for more central bank easing, Bernanke instead again took Congress to task for leading the nation close to a dire fiscal situation that could cause another recession.
Bernanke has been preaching against the series of spending cuts and tax increases that will take place automatically in 2013, and he delivered yet another warning of what he has called the “fiscal cliff.”
“The realization of all of the automatic tax increases and spending cuts that make up the fiscal cliff, absent offsetting changes, would pose a substantial threat to the recovery — indeed, by the reckoning of the Congressional Budget Office and that of many outside observers, a fiscal shock of that size would send the economy toppling back into recession,” Bernanke said, according to prepared remarks.
While an address two days before a major holiday otherwise might not get much notice, chatter had increased that Bernanke would indicate additional stimulative measures from the central bank.
The Dow industrials turned negative as the chairman’s remarks were made public and uncertainty increased over the Fed’s future plans. (Read More: Full Text of Bernanke Remarks)
Traders appeared to focus most on comments Bernanke made that the Fed did not have the ability to completely offset poor fiscal policy.”
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