(WASHINGTON) — The head of the nation’s central bank told D.C. lawmakers Wednesday that he’s leaving well enough alone so as not to derail the slow but steady economic recovery.
Appearing before a congressional Joint Economic Committee, Federal Reserve chairman Ben Bernanke declared that the economy is in better shape than it was at this time in 2012.
The Fed has kept interest rates at record low levels since December 2008 and Bernanke warned that raising them now could lead to slowing or ending the economic recovery and causing inflation to fall further.
Deflation might stall the economic recovery by driving down prices so low that businesses are unable to make a profit, forcing them to start laying off workers.
Speaking of unemployment, which stands at around 7.5 percent, Bernanke said it was important to keep seeing improvements in this area, especially since as many as eight million Americans, who have jobs, are only working part-time.
He maintained the Fed has no plans to stop buying $85 billion a month in mortgage-backed securities and Treasury bonds, a process that lowers long-term interest rates, including mortgage rates, which has stimulated a revival in the housing market.
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Madison Park, Keith Allen and Andreas Preuss, CNN