The Federal Reserve also released projections Wednesday for economic growth in coming years. Currently, Fed Board Members and bank presidents expect GDP growth to be between 2.0 and 3.2 percent next year, down slightly from their September projection of 2.3 to 3.5 percent. However, they also expect slightly improved jobless rates, at 6.9 to 7.8 percent, compared to September's 7 to 8 percent.
At the press conference, Bernanke said he suspected those projections were based on an assumption that the fiscal cliff is resolved, albeit with some "drag" on the economy.
Bernanke also took the time to warn lawmakers on the fiscal cliff, exhorting them to "achieve long-term sustainability without adopting policies that could derail the ongoing recovery."
The chairman also addressed the term "fiscal cliff" itself, which he is credited with popularizing. While some have characterized the cliff as more of a "slope," with economic effects that will only come gradually in 2013, Bernanke stood firm that the cliff is a major threat that is already affecting the economy. When asked what he thinks of the debate over the phrase "fiscal cliff," Bernanke called it a "sensible term."
"I don't buy the idea that a short-term descent off the fiscal cliff would not be costly," he said. "I think it would be costly, and in fact, we're already seeing costs."
Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. You can follow her on Twitter or reach her at firstname.lastname@example.org.
UPDATED ON 12/12/12: This story was updated to reflect economic projections from the Federal Reserve, as well as statements made by Federal Reserve Chairman Ben Bernanke.