Bernanke acknowledges ‘economy has worsened.’

During a Senate Banking Committee hearing today, Fed Chairman Ben Bernanke warned “that the country’s economic outlook has deteriorated” and the economy will continue to endure a “period of sluggish growth”:

The outlook for the economy has worsened in recent months, and the downside risks to growth have increased,” Bernanke said. “To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so.”