Bernanke defends Fed's low-interest-rate policies

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Associated Press

Posted on March 2, 2013 at 12:00 AM

Updated Saturday, Mar 2 at 3:02 AM

WASHINGTON (AP) — Chairman Ben Bernanke is defending the Federal Reserve's low-interest rate policies and seeking to calm fears that super-low rates risk igniting inflation or rattling investors.

Bernanke says any Fed move to raise rates prematurely could derail what is still a modest U.S. economic recovery. The central bank's low-rate policies are intended to encourage borrowing and spending to boost the economy. Higher rates would make borrowing more expensive.

Bernanke says the Fed's policies mirror what other central banks around the world are doing. His comments, which amplified testimony he gave to Congress this week, were delivered to a Fed conference in San Francisco.

Critics, both inside and outside the Fed, say they fear that the Fed may be raising the risk of financial instability.

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