Bernanke: Fed Could Act if Economy Weakens

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By MARTIN CRUTSINGER, Associated Press

WASHINGTON (AP) — Chairman Ben Bernanke says the Federal Reserve is prepared to take further steps if the U.S. economy weakens, but he didn't signal any action is imminent.

Bernanke says the European debt crisis poses significant risks to the U.S. financial markets. And he noted that U.S. unemployment remains high and the outlook for inflation subdued.

[Read: What Obama and Ben Bernanke Should Do About Gas Prices.]

Bernanke's comments in testimony to a congressional panel came one day after three Fed officials suggested that the central bank may need to do more to help the economy.

Most economists don't expect further moves at the Fed's next policy meeting June 19-20. They note that long-term rates have already touched record lows. Even if rates did decline further, analysts say they might have little effect on the economy.

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