Bernanke gloomy on economic outlook Ben Bernanke set out a gloomy outlook for the US economy but the Federal Reserve chairman offered no hint of further monetary easing in his prepared testimony to Congress on Tuesday. "The US economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year," Mr Bernanke said. He said that reduction in the 8.2 per cent unemployment rate "seems likely to be frustratingly slow." The testimony may disappoint markets - which are on tenterhooks for a signal of further monetary easing from the Fed - because Mr Bernanke did not go beyond the Fed's last statement that "it is prepared to take further action as appropriate to promote a stronger economic recovery." Mr Bernanke testifies before the Senate Banking Committee on Tuesday and the House Financial Services committee on Wednesday. In addition to monetary policy, he is likely to be quizzed about the scandal over manipulation of the London interbank offered rate. A run of weak data has led to speculation that the Fed could launch a third round of quantitative easing as early as its August meeting. Under so-called QE, a central bank buys bonds to push down long-term interest rates, boosting the economy even when short-term rates are already at zero. Mr Bernanke said that recent data points to annualised growth of less than 2 per cent in the second quarter of 2012. "Households remain concerned about their employment and income prospects and their overall level of confidence remains relatively low," he said. "Forward-looking indicators of investment demand - such as surveys of business conditions and capital spending plans - suggest further weakness ahead," said Mr Bernanke. But he remarked: "We have seen modest signs of improvement in housing." Separately on Tuesday, the latest data on consumer prices showed little sign of inflationary pressure, with the core index, excluding volatile food and energy prices, up 2.2 per cent from a year ago in June. Mr Bernanke chided Congress for its failure to act on fiscal policy, citing it as one of two main risks to the economy alongside the eurozone crisis, and warning against a repeat of the market volatility and loss of economic confidence caused by last summer's debacle over raising the debt ceiling. The Fed chairman has steadily ramped up his rhetoric on fiscal policy with each successive visit to Capitol Hill, but there is little sign that Congress is willing to compromise before the November election, even in order to boost growth. "The most effective way that the Congress could help to support the economy right now would be to work to address the nation's fiscal challenges in a way that takes into account both the need for long-run sustainability and the fragility of the recovery," said Mr Bernanke. Doing so earlier rather than later would help to reduce uncertainty and boost household and business confidence.