WASHINGTON (Reuters) - U.S. Federal Reserve
Chairman Ben Bernanke on Tuesday acknowledged a slowdown in the
economy but offered no suggestion the central bank is
considering any further monetary stimulus to support growth.
He also issued a stern warning to lawmakers in Washington
who are considering aggressive budget cuts, saying they have
the potential to derail the economic recovery.
A recent spate of weak economic data, capped by a report on
Friday showing U.S. employers expanded payrolls by a meager
54,000 workers last month, has renewed investor speculation
that the economy could need more help from the Fed.
"U.S. economic growth so far this year looks to have been
somewhat slower than expected," Bernanke said in remarks
prepared for delivery at a banking conference in Atlanta.
"A number of indicators also suggest some loss in momentum
in labor markets in recent weeks," he added.
However, Bernanke argued the latest bout of weakness would
likely not last very long, and should give way to stronger
growth in the second half of the year.
Citing a recent spike in U.S. inflation, Bernanke said it
was a worrisome trend but, like the economic softness, he
predicted the trend would be transitory.
He argued that weak growth in wages along with stable
inflation expectations gave him comfort that the economy was
under no immediate threat of an upward price spiral.
On the budget, Bernanke repeated his call for a long-term
plan for a sustainable fiscal path, but warned politicians
against massive short-term reductions in spending.
"A sharp fiscal consolidation focused on the very near term
could be self-defeating if it were to undercut the
still-fragile recovery," Bernanke said.
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