Moneycontrol
Feb 28, 2013 01:40 PM IST | Source: CNBC

Bernanke to Congress: Don't let sequester take place

Federal Reserve Chairman Ben Bernanke on Wednesday repeated testimony to Congress, defending the central bank's monetary easing and warning Congress against letting looming spending cuts take place.

Bernanke to Congress: Don't let sequester take place

Federal Reserve Chairman Ben Bernanke on Wednesday repeated testimony to Congress, defending the central bank's monetary easing and warning Congress against letting looming spending cuts take place.


"Given the still-moderate underlying pace of economic growth, this additional near-term burden on the recovery is significant," Bernanke told the House Financial Services Committee.


In testimony Tuesday, Bernanke strongly defended the Fed's easy monetary policy and said there was little risk of a spike in inflation in the near term.


In criticising the central bank's easy monetary policy, Sen. Bob Corker, a Republican from Tennessee, called Bernanke the biggest monetary dove since World War II.


Bernanke was quick to push back. "You called me a dove, well maybe in some respects I am, but on the other hand my inflation record is the best of any Federal Reserve chairman in the postwar period – or at least one of the best," he said, citing the 2 percent average inflation rate.

He also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a "significant headwind" for the economic recovery. (Read More: Americans Call Sequester a 'Bad Idea': NBC/WSJ Poll)

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