WASHINGTON—Federal Reserve Chairman Ben Bernanke told Congress Wednesday that global financial markets remain under “extraordinary stress” and that worsening conditions could further jeopardize the already troubled U.S. economy.

Bernanke and his Fed associates are fighting the biggest financial debacle since the Great Depression. On Wednesday, the Fed chief faced a second straight day of tough questioning on Capitol Hill about the Bush administration’s proposed $700 billion bailout plan.

Lawmakers have voiced skepticism about the plan aimed at shoring up troubled financial institutions and markets.

“Americans are furious,” said Sen. Chuck Schumer, D-N.Y., chairman of Congress’ Joint Economic Committee. Lawmakers were hearing “amazement, astonishment and intense anger” from their constituents, he said. Yet, he said he still believes some agreement on a bailout would soon be reached.

Bernanke has been trying to reassure the country that the Fed will “act as needed” to provide relief. Some analysts think interest rates might be lowered again soon.

The Fed chief appeared much more concerned about the stumbling economy right now than about the prospects of inflation getting out of control. The slowing economy should cause inflation to moderate later this year and next, he said.

In testimony to the Joint Economic Committee, Bernanke repeated his warning of dire economic consequences if the bailout isn’t enacted and if credit woes persist. Neither businesses nor consumers would be able to borrow money, he said, adding that such a scenario could result in the world’s largest economy grinding to a virtual halt.