Bernanke spoke about the sequester before the Senate Banking Committee on Tuesday.
Many Republicans are skeptical of the Fed’s approach, and Sen. Bob Corker charged at Bernanke with a series of sharp questions about the impact of Fed actions. The Tennessee Republican accused Bernanke of launching “a global currency war,” “throwing seniors under the bus” and “working for the [banks] that they regulate.”
Bernanke refuted each criticism one by one, eventually saying, “None of the things you said are accurate.”
Corker’s comment about harming seniors referred to complaints that the Fed’s low interest rate policy is unfair to savers and the elderly who are on fixed incomes. He also said Bernanke’s efforts to boost employment make him “the biggest dove, if you will, since World War II.”
Bernanke said higher interest rates could not be sustained amid a weak economy.
Responding to the ‘dove’ remark, he said, “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 post-war period, or at least one of the best.”
Indeed, despite continued warnings from conservatives about higher inflation, the annual inflation rate has averaged 1.6 percent since 2009 and was 1.6 percent in January — below the central bank’s target 2 percent rate of inflation. Unemployment remains at 7.9 percent, and Bernanke has said the Fed will keep interest rates low until it falls to 6.5 percent.
Bernanke testifies before the House Financial Services Committee on Wednesday, where similar debates are expected to take place.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.