WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke renewed his promise on Thursday that the central bank could put more monetary stimulus into play if the economic recovery stumbles.
On the second day of delivering the Fed's semiannual monetary policy report to Congress, Bernanke is also expected to repeat his warning that a debt default would be devastating for the U.S. and the global economy.
A ratings agency warned late on Wednesday the U.S. could lose its top credit rating in coming weeks if a standoff between the White House and congressional Republicans over raising the debt ceiling is not resolved.
Bernanke's prepared comments to the Senate Banking Committee closely reflect remarks delivered to a House of Representatives panel on Wednesday.
Reports released on Thursday showed some signs economic activity could be picking up. Retail sales rose in June, and claims for unemployment benefits fell last week.
However, producer prices posted their steepest decline since February 2010 as energy prices eased. While Fed policymakers have been worried about rising inflation, the risk of a damaging deflationary spiral could force the central bank to act to promote growth.
(Reporting by Mark Felsenthal; Editing by Neil Stempleman)
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