By Pedro da Costa and Mark Felsenthal –
WASHINGTON | Tue Jul 17, 2012 11:54am EDT
(Reuters) – Federal Reserve Chairman Ben Bernanke on Tuesday offered few new clues on whether the central bank was moving closer to a fresh round of monetary stimulus, repeating the Fed’s pledge to act if needed.
He told the Senate Banking Committee the U.S. economic recovery was being held back by tighter financial conditions due to Europe’s debt crisis and uncertainty surrounding U.S. fiscal policy.
Financial markets had looked forward to Bernanke’s testimony for any signs the central bank was moving closer to a third round of bond purchases — or QE3 in market parlance — to support the economy.
But the Fed chief disappointed investors, hewing closely to the message of watchful waiting that the central bank’s policy panel delivered in June.
“Reflecting its concerns about the slow pace of progress in reducing unemployment and the downside risks to economic growth, the committee made clear at its June meeting that it is prepared to take further action,” Bernanke said in his testimony on the Fed’s semi-annual monetary policy report.