Fed Chairman Ben Bernanke returned to capital hill yesterday and today to talk to Congressional banking committee members about the central bank’s role in the JP Morgan Chase takeover of Bear Stearns, the state of the overall economy, and the steps the central bank was taking to alleviate the credit situation. Bernanke’s comments, both in his written statements and in the Q&A sessions, are notable for what he didn’t say as much as what he did say.

The Fed Chair used his comments for justify the central bank’s non-bailout bailout of Bear Stearns with the aid of Morgan as a way of preventing economic dislocations that could have spread far beyond Wall Street. In the process, Bernanke offered a downbeat forecast for the first half of the year. He suggested that a shallow contraction can’t be ruled out, although he didn’t use the word “recession” in his prepared remarks.

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