Bernanke Defends Federal Reserve Policy

Federal Reserve Chairman Ben Bernanke faced a skeptical house budget committee- defending the central bank's policies. 

In his prepared remarks, he re-iterated concerns about the jobs picture despite signs of economic improvement.              

[Ben Bernanjem Chairman, U.S. Federal Reserve]:               

"It will be several years before the unemployment rate has returned to a more normal level. Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established." 

Bernanke also confirmed the central bank's commitment to quantitative easing or QE2- their plan to buy $600 billion dollars in government debt to keep interest rates low.  

House budget committee chairman Paul Ryan questioned him on the plan's potential for inflation.

[Paul Ryan (R), Chairman, House Budget Committee]:               

"Just take a look at today's Wall Street Journal - Inflation worries spread." 

Bernanke said U.S. inflation remained low at just one percent- and was adamant the Fed was prepared to pull back- but not until the time was right.              

[Ben Bernanjem Chairman, U.S. Federal Reserve]:     

"It is always an issue as you know Mr. Chairman that in the recovery period you have to pick the right moment to begin removing accommodation, taking away the punch bowl and we of course face that problem as the central bank always does, but we are committed to making sure that we do it at the right time." 

Bernanke added that there is little the Fed's monetary policy can do about rising commodity prices around the world - driven by everything from bad weather in Russia, to higher oil demand in China and Brazil.