"I expect the economy to continue to expand in the second half of this year, albeit at a relatively modest pace," he said before a crowd in Jackson Hole, Wyo. Friday at an annual meeting of the Federal Reserve.
He said the Federal Reserve was prepared to take further steps to stimulate the economy if necessary, including buying government debt or reducing interest rates paid on banks' excess reserves.
Bernanke's comments came amid announcements of numbers showing that economic growth had slowed less than expected during the second quarter of 2010.
Gross domestic product grew just 1.6 percent over that period. Bernanke said though economic growth appears to be slow with persistent unemployment and a depressed housing market, the conditions for an upswing in 2011 are in place.