Fed Chairman Ben Bernanke says growth will be ‘frustratingly slow’

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Federal Reserve Chairman Ben S. Bernanke said the central bank is doing all it can to spur the economy and reduce unemployment, but admitted that growth “is likely to be frustratingly slow.”

That slower growth -- reflected in a downgrade of the Fed’s economic projections for the rest of the year and beyond -- is not satisfactory, Bernanke told reporters at a news conference Wednesday.

“I certainly understand that many people are dissatisfied with the state of the economy,” he said. ‘I’m dissatisfied with the state of the economy.”

Bernanke said the Fed was prepared to take stronger action, but for now it was standing pat.

The Fed’s policymaking Open Market Committee took no new actions at the conclusion Wednesday of its two-day meeting, citing somewhat improved economic growth recently, including increased household spending and continued investments by businesses in equipment and software.

But the Fed warned of “significant downside risks to the economic outlook, including strains in global financial markets” -- a clear reference to the European debt crisis.

Bernanke said it was “a bit frustrating” waiting on the sidelines for European leaders to address their problems. “Unfortunately we can’t disassociate ourselves from Europe. The things that happen there do affect us,” he said.

Bernanke said the situation there adds to a string of negative events, particularly the Japanese earthquake and tsunami, that have hampered the U.S. recovery.

“There has been a certain amount of bad luck and I think the volatility in financial markets associated with the European situation has been a drag on the recovery,” Bernanke said. “It’s part of the reason why the second half of 2011 was less strong.”

The continued volatility has dampened the confidence of U.S. consumers, and Bernanke advised people to continue to try to make good financial decisions until the economy is stronger.

“My best advice to Americans is to continue to live your lives and continue to think about your personal situation and continue to make smart decisions based on your own financial situation,” he said.

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-- Jim Puzzanghera in Washington