This morning Ben Bernanke testified before Congress delivering his Semiannual Monetary Policy Report.

The report concludes that unemployment is still high and the reduction of the unemployment rate is taking longer than desirable. The report also reaffirms previous FED statements that the FED will keep rates exceptionally low at least through 2014.

Semiannual Monetary Policy Summary

The Economic Outlook

• U.S. economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year.
• Household spending has continued to advance, but recent data indicate a somewhat slower rate of growth in the second quarter.

Risks to the Outlook

•  There are two main sources of risk: The first is the euro-area fiscal and banking crisis; the second is the U.S. fiscal situation.
• U.S. fiscal policies are on an unsustainable path, and the development of a credible medium-term plan for controlling deficits should be a high priority. At the same time, fiscal decisions should take into account the fragility of the recovery. That recovery could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken.

Monetary Policy

•  In view of the weaker economic outlook, subdued projected path for inflation, and significant downside risks to economic growth, the FOMC decided to ease monetary policy at its June meeting by continuing its maturity extension program (or MEP) through the end of this year.
• As expected Bernanke, reaffirmed that rates will be keep exceptionally low through at least 2014.

About the Semiannual Monetary Policy Report (from Wikipedia):

The Monetary Policy Report to the Congress is a semi-annual report prepared by the Board of Governors of the Federal Reserve and presented to the Congress of the United States. The Chairman of the Board of Governors is called on to offer oral testimony about the report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services to the House of Representatives.
Monetary Policy Reports are mandated by the Humphrey-Hawkins Full Employment Act of 1978, which required the Federal Reserve to formally report on its activities to Congress. The Monetary Policy Reports were previously referred to as Humphrey-Hawkins reports.
The Monetary Policy Report is delivered twice a year, in February and July, and reports the basic state of the United States economy and its financial welfare. Each report contains two sections. The first section summarizes past policy decisions and their predicted economic impact. The second section focuses on recent financial and economic developments.