WASHINGTON (MarketWatch) -- The Federal Reserve has done a lot to stave off a recession but stands ready to do more if the outlook darkens, Federal Reserve Chairman Ben Bernanke said Thursday. Bernanke said the Fed will be working overtime to see if the rate cuts undertaken so far are having their intended effects. Bernanke painted an "improving picture" for the economy, saying that he expects a stronger pace of growth starting later this year after an unspecified "period of sluggish growth." Inflation should moderate from its current rate, and the public's expectation of inflation should remain "reasonably well anchored," he said. But the credit squeeze should continue to dampen growth and there is no end in sight to the downturn in the housing sector, he said.