Federal Reserve Chairman Testifies on Capitol Hill About the Economy

By Daniela Salvador

June 7, 2012 Updated Jun 7, 2012 at 12:32 PM EDT

Washington (Indiana’s NewsCenter) - Federal Reserve Chairman, Ben Bernanke, testified on Capitol Hill about the state of the U.S. economy on Thursday.

Bernanke said, despite the slow recovery, there are encouraging signs of improvement.

“Labor market conditions improved in the latter part of 2011 and earlier this year,” Bernanke said. “Economic growth appears poised to continue at a moderate pace over coming quarters.”

Last month, there were disappointingly high unemployment numbers, job creation dramatically slowed and the economy grew at a weaker than expected rate.

However, Bernanke remained vague never outlining any new policies the Federal Reserve will take to shore things up.

“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,” Bernanke said.

His testimony comes after the stock market soared to its best day of the year Wednesday and closed up almost 300 points.

Experts said the rally came after officials in Europe indicated they would try to rescue Spain's banking system.

The move avoids a dangerous domino effect that could have deepened the European debt crisis.

Jeff Mackey said, "What we are excited about is the coordination of banks from around the world."

It’s encouraging news all around considering the damage the crisis has already done.

"The crisis in Europe has affected the U.S. economy by acting as a drag on our exports and pressuring U.S. financial markets and institutions," Bernanke said.

As for the Federal Reserve planning to do anything to help the ailing economy, Bernanke said his team will have to weigh the costs and risks against the benefits before taking any action.

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