The US Federal Reserve Chairman Ben S. Bernanke appeared before the Senate Banking Committee an Thursday, forecasting a rather slow, but not negative growth in the US economy, which would be helped, if not assured by the Fed.

Bernanke stated that the Fed would "act in a timely manner" in order to ensure economic growth, a statement that was interpreted as a hint at further interest rate cuts.

Bernanke, who was joined by the Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman, Christopher Cox, said that even if the economic growth would be insignificant in January, due to the worsening economy outlook in the last months, there would be improvements that are expected to occur in the second half of the current year.

"My baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year," Bernanke said.

The Fed tried do everything in its power to help the economy, as it had cut the target for the federal funds rate by 225 basis points since September, he said, including the largest ever cut made only in a month of 125 basis points in January.

But, "monetary policy works with a lag," he said, and many sectors have "softened."

Bernanke addressed the Senate, talking about "a virtual shutdown of the subprime mortgage market and a widening of spreads on jumbo mortgage loans," as well as the loss of 17.000 jobs during January.

The chairman said that since so many houses remained unsold and the inflation increased by "the steep run-up in the price of oil," the risks that the growth still remains low are obvious and real.

Talking about the US current economic state, Bernanke had a precautious position, as he said that the future could bring more bad news, even if the Fed is doing all it can to sustain a good outlook. Bernanke also noted that "bank balance sheets have swollen," which means that its ability to extend fresh credit is smaller, as it has to focus mainly on strengthening its balance sheets.