By Peter Schroeder - 08/26/11 07:05 PM EDT
"The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses," he said Friday from Jackson Hole, Wyo. "It is difficult to judge by how much these developments have affected economic activity thus far, but there seems little doubt that they have hurt household and business confidence and that they pose ongoing risks to growth."
Rather, the central bank chairman said policymakers need to find a way to adopt policies that encourage economic growth while getting the country's fiscal health in better shape. While saying the Fed is weighing options to further stimulate the economy, Bernanke maintained that much of the issues facing the economy now fall out of its reach.
"Most of the economic policies that support robust economic growth in the long run are outside the province of the central bank," he said.