5 Oct 2011

US economy ''close to faltering'' - Bernanke

9:09 am on 5 October 2011

US Federal Reserve Chairman Ben Bernanke has told Congress that the US economy is "close to faltering" and more action may be needed.

He told the Joint Economic Committee that the Fed was prepared to take further action as appropriate to bolster the recovery.

The Fed has already decided to shift $US400 billion worth of investments into longer-term government debt.

On the subject of the eurozone debt crisis, Mr Bernanke said there was little help the United States could offer.

''The problems are not really economic, they're political,'' he said.

''Because what they are trying to do is find solutions that are acceptable to 17 different countries, which you can imagine is very difficult.''

Mr Bernanke warned that the eurozone debt crisis, as well as overly hasty spending cuts by the federal government, risked undermining the US recovery.