Bernanke steps up warnings over fiscal cliff

US Fed chairman Ben Bernanke stepped up his warnings over the looming US fiscal cliff. 

Mr Bernanke said its mandatory tax hikes and spending cuts posed a substantial threat to US economic recovery. 

With US President Barack Obama's administration and Congress locked in crunch talks on avoiding the cliff and slashing the budget deficit, Mr Bernanke said rising cuts to federal spending were already holding back growth. 

Mr Bernanke said the Federal Reserve already views growth as disappointingly slow and troubled by threats from the eurozone crisis, slow job creation and the reticence of banks to loosen lending standards -- which Mr Bernanke said is holding back recovery in the housing sector. 

The unemployment rate, currently 7.9 percent, remains "well above" what Fed officials want to see, Mr Bernanke said, adding that the country has "some way to go before the labor market can be deemed healthy again."