NEW YORK (CNNMoney.com) - Federal Reserve Chairman Ben Bernanke told lawmakers Tuesday that the economy has started to show signs of stabilization, although he cautioned that improvement is uncertain and likely to be gradual going forward.
Bernanke also reiterated that the Fed will be able to keep inflation at bay by unwinding many of the various lending programs it has put in place to encourage banks to start lending again. But he declined to give a time frame for when the Fed might begin its so-called exit strategy.
The head of the central bank, appearing before the House Financial Services Committee in his semi-annual testimony on the state of the economy, forecast a relatively sluggish recovery.
Bernanke said the unemployment rate would be higher than preferred levels until at least 2012. But he added that steps taken by the Fed to pump money into the economy have started to pay benefits.