Bernanke: Lower Rates Are 'Feasible'

Bernanke spoke just hours after the National Bureau of Economic Research announced that the U.S. economy has been in a recession since December 2007.

NBER -- a private, nonprofit research organization -- said its group of academic economists who determine business cycles met on Friday and decided that the U.S. recession began at that time. The economy contracted in the final quarter of last year.

The Fed chief didn't mention the NBER's finding in his speech, but he warned that the economy likely will remain stuck in a slump.

"Even if the functioning of financial markets continues to improve, economic conditions will probably remain weak for a time," Bernanke said.

Consumers -- major shapers of national economic activity -- likely will keep cutting back on their spending, he said. Consumers have been reeling from job losses, hard-to-get credit and hits to their wealth from sinking home values and tanking portfolio investments.

The economy jolted into reverse again in the summer. Many economists predict it is still shrinking now and will continue to do so through the first quarter of next year.