Big Ben opened his big mouth again today, and it seems his outlook on the economy is getting a bit more bearish each time his voice hits the airwaves.

Testifying today at the Senate Banking Committee, he said he now expects “sluggish growth” in the economy but predicted a “somewhat stronger pace” later in the year. He went on to attribute his stronger pace forecast to rate cuts and fiscal stimulus.

He threw in the caveat that housing and labor markets could deteriorate more than anticipated, emphasizing that “downside risks to growth remain.”

It seems that Bernanke is drawing criticism from Washington from both Republicans and Democrats, arguing that the recent efforts to help fend off a recession were too late or insufficient.

“When you see something coming, don’t put it off,” Republican Sen. Jim Bunning of Kentucky told Mr. Bernanke. “Take action immediately. This housing market has been coming to us for a year, year and a half, and we didn’t react properly to it.”

This just reinforces the “we must do something” mentality of those in Washington… This mentality could relieve Bernanke of his position after his first term if things don’t start to turn up.

The Dow dropped 175 points after Bernanke quit talking… go figure.

I found the following video clip interesting. The buzz on the street has all but locked in yet another rate cut, and it appears that Bernanke is starting to accept the reality and the economic effects of a bleeding housing market and a troublesome credit problem are finally starting to rear their ugly head.

Tags: bernanke | Economics | FED policy | video

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