Talks on the federal budget and possibly raising the debt limit are scheduled to continue at the White House today. On Wednesday, the U.S. dollar fell against most major currencies after the Moody’s credit rating agency warned the United States may lose its top credit rating unless the debt ceiling is raised. Testifying in Congress, Federal Reserve Chairman Ben Bernanke said a U.S. default on its debt payments would be “calamitous,” adding that the Fed is prepared to intervene in the economy should it suffer further contraction.

Ben Bernanke: “The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support. The most recent data attest to the continuing weakness of the labor market. The unemployment rate increased to 9.2 percent in June, and gains in non-farm payroll employment were below expectations for a second month.”