Federal Reserve Chairman Ben Bernanke told lawmakers Wednesday that the economy is likely to grow at a tepid pace for the rest of 2011.
He said at a hearing of the House Financial Services Committee that "the pace of the economic recovery over coming quarters will likely remain moderate, that the unemployment rate will consequently decline only gradually, and that inflation will subside.’’
Bernanke also said the decline in home values is causing the stagnation of household wealth.
But he added that all is not bleak.
“On the positive side, household debt burdens are declining, delinquency rates on credit card and auto loans are down significantly, and the number of homeowners missing a mortgage payment for the first time is decreasing,” the Fed chair said.
“The anticipated pickups in economic activity and job creation, together with the expected easing of price pressures, should bolster real household income, confidence, and spending in the medium run,” Bernanke said.