US Federal Reserve chairman Ben Bernanke told lawmakers a day after a global stock rout that his economic outlook was unchanged.
"There didn't seem to be any single trigger of the market correction we saw yesterday," he told a House of Representatives panel a day after the sharpest decline in global stocks in years.
"I don't think it would be useful for me to try to parse the movement into the components associated with different pieces of news or pieces of information," the top US central banker said.
His comments appeared to soothe nerves on Wall Street.
The blue-chip Dow Jones industrials gained 0.43 percent a day after the sharpest decline since 2001.
Earlier, Chinese markets also bounced back after the 9 percent slide in Shanghai, but many other bourses remained under pressure.
"Bernanke seemed to reassure the market when he told a House committee that he continues to look for moderate growth in the US economy, and the economy may strengthen later this year," market strategist Al Goldman at AG Edwards said.
Bernanke said the Federal Reserve "has been closely monitoring the markets" and added that "they seem to be working well, normally."
He added that he saw no liquidity problems in the markets.
As for the US economic outlook, Bernanke said: "My view is that, taking all the new data into account, that there is really no material change in our expectations for the US economy since I last reported to Congress a couple weeks ago."
His comments came shortly after the Commerce Department made a sharp downward revision to US GDP growth in the fourth quarter to 2.2 percent from an earlier estimate of 3.5 percent.
"We are looking for moderate growth in the US economy going forward, and I would add parenthetically that the downward revision of the fourth quarter GDP numbers we got this morning was actually more consistent with our overall view of the economy than were the original numbers," he said.
"So we expect moderate growth going forward," he said.
Bernanke said if the housing sector steadied and inventory adjustments were completed, "there is a reasonable possibility we'll see some strengthening of the economy some time during the middle of the year."
Bernanke echoed concerns of private economists about failures of so-called subprime mortgages, or those seen as riskier than normal because of borrowers' poor credit.
"We've seen increasing rate of defaults" in this sector, Bernanke told lawmakers.
"We've seen financial distress on the part of lenders. And so that is a concern. We are monitoring that situation very carefully. And it was one of the factors, I think, which has contributed to some unease about the economy and the market," he said.
But Bernanke said the Federal Reserve's assessment "is that there is not much indication at this point that subprime mortgage issues have spread into the broader mortgage market, which still seems to be healthy."
"So it's a concern, but at this point we don't see it as being a broad financial concern or a major factor in assessing the course of the economy," he added.
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