In his prepared testimony before the House Budget Committee, Federal Reserve Chairman Ben Bernanke noted improvement in the US economy – but at a sluggish and discomforting rate.  The sentiment is similar to previous comments made at the last Federal Reserve meeting about a week ago.

Although US labor markets have shown positive “signs of improvement”, Bernanke noted that “the outlook remains uncertain, however, and close monitoring of economic developments will remain necessary.”  Looking back over the last several months, improvements in both manufacturing and services subcomponent readings have helped to boost confidence a bit – which some have pointed to as lending support for US investments.  The broader equity index, S&P500 has ended the month of January higher than 4% – making it the best January performance in 15 years.

Nonetheless, the current “pace of the recovery has been frustratingly slow” where a “sluggish expansion has left the economy vulnerable to shocks.”

In order to deal with the current environment, Chairman Bernanke along with other central bankers have highlighted the simple fact that the Federal Reserve remains committed to doing “its part in supporting the economy”.  The sentiment is increasing speculation of yet another round of quantitative easing that may be around the corner for the world’s largest economy – even as growth forecasts are in the area of 2-3% for 2012.