Federal Reserve Chairman Ben Bernanke tells Congress that the economy is facing "numerous difficulties."

Those include financial market strains, rising joblessness and housing problems - despite the Fed's aggressive interest rate reductions and other measures over the past year.

Testifying before the Senate Banking Committee, Bernanke says rising prices for energy and food are fanning inflation risks. He says the problems pose "significant challenges" for Fed policymakers.

Looking through the end of the year, Bernanke says the economy will grow "appreciably below its trend rate."

He warns that inflation "seems likely to move temporarily higher in the near term."

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