The Federal Reserve chairman told the House budget committee: “With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by Congress at this juncture seems appropriate.”
Mr Bernanke said he would support further efforts to aid the restructuring of troubled mortgages, but did not back any particular plan to achieve this. “I would support further steps to make sure that everyone who can sustain a mortgage and wants to stay in a home can do so,” he said.
He warned that the economy would be weak for several quarters and the “uncertainty over the economic outlook is unusually large”. The timing of recovery would “depend greatly on the pace at which financial and credit markets return to more normal functioning”.