Federal Reserve Chairman Ben S. Bernanke said the economy is at risk from Europe’s debt crisis and the prospect of fiscal tightening in the U.S., while refraining from discussing steps the central bank might take to protect the expansion.
“The situation in Europe poses significant risks to the U.S. financial system and economy and must be monitored closely,” Bernanke said today in testimony to the Joint Economic Committee in Washington. “As always, the Federal Reserve remains prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate.”
European Central Bank President Mario Draghi said yesterday that ECB policy makers discussed cutting interest rates to a record low, fueling expectations they’ll act as soon as next month as the intensifying debt crisis curbs growth.
“New business starts down at the bottom end are still in negative territory, and until we see that begin to tick up, we’re not forecasting for ourselves any kind of change in trajectory of the current economic environment,” Stephenson said. We are “seeing no hiring, basically, that would drive our type of business.”