Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington, 16 Jul 2008

Ben Bernanke testified before lawmakers for the second consecutive day Wednesday, reiterating the need to stabilize financial markets while refusing to characterize the economy as being in a recession.

His comments to the House Financial Services Committee come as another government report showed inflation, led by soaring energy prices, was on the rise.

Bernanke voiced support for a more aggressive energy policy.

He said the energy markets are forward-looking and that a combination of conservation, alternative fuels and exploration for additional resources could bring prices down in the near term.

Bernanke told lawmakers on the Senate Banking Committee Tuesday the economy faces "numerous difficulties," and that threats to the country's economic well-being have increased.

Bernanke urged lawmakers Wednesday to act on legislation to help bolster government-sponsored lending giants Fannie Mae and Freddie Mac. Lawmakers say they could act on the measure next week.

He also said it was too soon to say whether a second economic stimulus package would help spur the economy. And while he said there may be times when temporary actions may be justified to boost the value of the dollar, the best policy is to strengthen the economy.

Also Wednesday, White House spokeswoman Dana Perino told reporters that President George Bush is "very concerned" about the jump in consumer prices.

The president Tuesday said although the country is going through a tough time, he believes it will emerge "stronger than ever before."

Meanwhile, a new report today finds the confidence of U.S. homebuilders has dropped to a record low.

The National Association of Home Builders/Wells Fargo index says prospective homebuyers are waiting on the sidelines until conditions improve.

Some information for this report was provided by AFP, AP and Reuters.

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