Fed Says Economic Recovery Still on Track

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Federal Reserve Chairman Ben Bernanke says he expects a moderate economic recovery to continue this year.

Speaking at the first press conference held by the Federal Reserve in its history on Wednesday, Bernanke added that the economy would grow at a slightly slower pace than originally forecast and would still require monetary support.

He indicated that the Fed would maintain its monetary stimulus after its bond-buying program ended in June, while the need to contain inflation would make further quantitative easing "less attractive."

"It's not clear that we can get substantial improvements in payrolls without some additional inflation risk," Bernanke told reporters. "Ultimately, if, if inflation persists or if inflation expectations begin to move, then there's no substitute for action," he said. "We would have to respond."

The 57-year-old Fed chief said he expects the unemployment rate, currently at a two-year low of 8.8 percent, will fall about a half-point by the end of the year.

Wednesday's press conference was part of an effort by Bernanke to make the central bank more transparent and to repair its image with the public.

Bernanke reasoned that if the Fed could communicate its intentions more clearly, "there would naturally be less volatility" in the markets.

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