Ben Bernanke offered a gloomy outlook for the US economy but the Federal Reserve chairman offered no hint of further monetary easing in testimony to Congress. "We are looking very carefully at the economy, trying to judge whether or not the loss of momentum we've seen recently is enduring, and whether or not the economy is likely to continue to make progress," he said, warning that progress in reducing a 8.2 per cent unemployment rate "seems likely to be frustratingly slow." The testimony disappointed markets - which are on tenterhooks for a signal of further monetary easing from the Fed - with stocks falling and the dollar rising before turning around by midday in New York. A run of weak reports on the economy, with net job creation falling to 80,000 in June, has led to speculation that the Fed could ease policy further as soon as its August meeting. The Fed chairman set out a list of options for further easing but refused to say which he might prefer. The logical range includes different types of purchase programs. That could include Treasuries or include Treasuries and mortgage-backed securities. Those are the two things we're allowed to buy," he said. Asset purchases - also known as quantitative easing - are a way of driving down long-term interest rates to boost the economy when short-term rates are already at zero. The Fed's other options include lending via the Fed's discount window, communications about future policy, or cutting the interest that the Fed pays banks on excess reserves, Mr Bernanke said. We haven't really come to a specific choice at this point, but we are looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labour market. New data on Tuesday showed little sign of inflationary pressure - the overall consumer price index was up by 1.7 per cent on a year ago - and a rebound in industrial production, which was up 0.4 per cent in June after falling in May. The Fed chairman has 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.