Bernanke: Efforts by Fed helped economy

WASHINGTON – Chairman Ben Bernanke told lawmakers Wednesday that the Federal Reserve’s efforts to bolster growth have helped lift the U.S. economy out of the recession. But he acknowledged that the economy remains weak and the Fed can only do so much.

“I don’t think it is the case that there has been no progress. The recovery has been slower than we like but clearly we have made progress,” Bernanke told the House Financial Services Committee.

Bernanke was on the Hill to deliver his twice-a-year report to Congress on the state of the economy. But he spent part of the hearing defending the Fed’s previous two rounds of large-scale bond purchases against Republican criticism.

The economy has weakened since the start of the year, and Bernanke said the Fed is prepared to take further action if unemployment stays high. His comments were similar to those he made Tuesday to the Senate Banking Committee.

Many economists interpreted the remarks to mean the Fed will likely launch a third round of bond purchases, perhaps in the fall. That’s because few expect the unemployment rate, which was 8.2 percent last month, to fall much further by then.

The bond purchases seek to lower long-term interest rates and encourage more borrowing and spending.

During the hearing, Bernanke voiced objections to a bill being sponsored by Rep. Ron Paul, R-Texas. It would expand the power of Congress to audit the Fed’s operations. The House is expected to vote on Paul’s legislation next week.

The bill threatens the Fed’s independence because it would allow Congress to request documents supporting changes in interest rates, Bernanke said. That could make some Fed policymakers hesitant to support changes, he noted.

“That is very concerning,” Bernanke said.