Bernanke: Record-low interest rates still needed

WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke told Congress today that record-low interest rates are still needed to ensure that the economic recovery will last and to help ease the sting of high unemployment.

In his twice-a-year report to the House Financial Services Committee, Bernanke struck a confident tone that the recovery should endure. But he also sought to tamp down expectations.

The moderate economic growth the Fed expects will lead to only a slow decline in the nation's nearly double-digit unemployment rate, he said.

He offered no new clues about the timing of an interest-rate increase. Most economists think it is months away. Bernanke said rates will need to stay at exceptionally low levels for an extended period "as the expansion matures."

Investors took Bernanke's remarks in stride on a morning when the government said sales of new homes fell to a record low in January and the Senate passed a bill intended to help create jobs.

The jobs legislation would give tax breaks to businesses that hire the unemployed. In mid-morning trading, the Dow Jones industrial average rose 98 points, or about 1 percent.

Bernanke is facing more pressure than usual from lawmakers in an election year. Their constituents are struggling economically, while bailed-out Wall Street banks are profitable again.

Unemployment stands at 9.7 percent, home foreclosures are at record highs and individuals and businesses are having trouble getting loans.