Washington – The chairman of the U.S. Federal Reserve told lawmakers Tuesday that promoting growth is "a shared responsibility," emphasizing the limited impact of purely monetary measures.
"Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the U.S. economy," Ben Bernanke said in testimony to the Joint Economic Committee of Congress.
"Fostering healthy growth and job creation is a shared responsibility of all economic policymakers, in close cooperation with the private sector," he said.
The Fed chairman emphasized that "recent indicators, including new claims for unemployment insurance and surveys of hiring plans, point to the likelihood of more sluggish job growth in the period ahead," and thus he predicted that the unemployment rate will remain around 9 percent in the coming months and urged lawmakers not to take measures that could cause the fragile economic recovery to contract.
"(I)t is clear that, overall, the recovery from the crisis has been much less robust than we had hoped ... Consequently, the Federal Open Market Committee now expects a somewhat slower pace of economic growth over coming quarters," he said.
According to the latest official figures, the rate of growth of the U.S. gross domestic product in the second quarter was 1.3 percent.
The chairman also acknowledged that the European debt crisis has been a "significant" source of stress in the global financial markets.
"European leaders are strongly committed to addressing these issues, but the need to obtain agreement among a large number of countries to put in place necessary backstops and to address the sources of the fiscal problems has slowed the process of finding solutions," he said.
Europe's financial stresses, Bernanke said, "have hurt household and business confidence, and ... they pose ongoing risks to growth."