Testifying on Capitol Hill Tuesday, Fed Chairman Ben Bernanke conceded the obvious: "Economic activity appears to have decelerated somewhat during the first half of this year."
"Risks to economic growth have increased," he said, citing Europe's debt crisis and the U.S. "fiscal cliff" as big concerns.
Predictably, the Fed Chairman reiterated the Fed's pledge to "take further action as appropriate to promote a stronger economic recovery."
But Bernanke did not give any additional specifics about the timing of additional policy easing, prompting a midday sell-off in stocks. (The Dow fell about 155 points from its morning high near 12,800 but was back in positive territory in recent trading.)
"The market was hoping he'd a least hint, if not show some sort of commitment to changing from an extension of Operation Twist to outright quantitative easing in the near term," says Michael Pond, managing director and co-head of U.S. rates strategy at BarclaysRead More »from Bernanke Doesn’t Blink But “Rates Could Go Lower Still,” Pond Says