Bernanke Gives Few Specifics On How Fed Will Help Ailing Economy

August 27, 2010 — -- Federal Reserve Chairman Ben Bernanke acknowledged the economic "elephant" in the room--that the U.S. economy has weakened far more than expected.

At a meeting of the Fed's top policymakers, Bernanke called the economic recovery "inherently uncertain."

Bernanke's affirmation of the economy's sluggish economic recovery comes after a week of troubling economic news.

Just 90 minutes before Bernanke spoke, the government released the latest Gross Domestic Product numbers for the second quarter showing that the country's economic output slowed sharply to a 1.6 percent pace. Earlier in the week, sales of existing homes hit a record low and unemployment continues to hover at 9.5 percent.

Bernanke said the economy "remains vulnerable to unexpected developments."

The thousands of people who lined up at dawn in Palm Beach County, Florida know plenty about unexpected developments. The slow recovery is something they feel every day. Coming by busloads, they venture to Palm Beach's convention center to get help modifying their mortgages in a desperate bid to hold onto their homes.

Out west in San Fernando Valley, California, families are now getting turned away at food pantries, with supplies at near record lows.

Economists say that with economic growth at such a weak pace, the nation's unemployment rate could climb past 10 percent later this year or early next year.

Economic Recovery On Hold

All of this is further proof of an economic recovery on hold.

"At this juncture, the committee has not agreed on specific criteria for triggers for further action," Bernanke said.

While not offering specifics, Chairman Bernanke said that the Federal Reserve is standing ready to help, but what can it do?

Jon Hilsenrath from the Wall Street Journal said that the Fed could lower interest rates even more. Already, they are at a historic low of zero to 0.25 percent.