WASHINGTON May 22 The Federal Reserve's
monetary stimulus is helping the U.S. economy recover, and the
central bank needs to see further signs of traction before
taking its foot off the gas, central bank chairman Ben Bernanke
said on Wednesday.
In testimony that offered no sign that he is ready to
retreat from the Fed's latest round of bond buying, Bernanke
emphasized the high costs of unemployment and inflation that
continues to run below the central bank's target.
"Monetary policy is providing significant benefits,"
Bernanke said in remarks prepared for delivery to the Joint
Economic Committee of the U.S. Congress, citing strong consumer
spending on autos and housing, as well as increases in household
"Monetary policy has also helped offset incipient
deflationary pressures and kept inflation from falling even
further below the (Fed's) 2 percent longer-run objective."
He said part of the reason for low inflation was a decline
in energy prices. But there were also indications of more
broad-based disinflation, Bernanke said.
"Price inflation for other consumer goods and services has
also been subdued," he said.
Bernanke reiterated that the Fed was prepared to either
increase or reduce the pace of its bond buys depending on
economic conditions, as the central bank stated on May 1 after
its last policy meeting.