Ben S. Bernanke, the Federal Reserve chairman, told Congress on Wednesday that the central bank did not intend to start raising short-term interest rates anytime soon, saying the economic recovery would remain halting for many more months.
In what appeared to be a deliberate response to the criticisms leveled at the Fed, Mr. Bernanke announced support for two measures to improve oversight of the extraordinary lending programs the Fed started in 2008.
In one of the moves toward openness, Mr. Bernanke said the Fed would back legislation requiring the eventual release of the names of borrowers that used the programs.
He also said the Fed had undertaken “an intensive self-examination” of its regulatory duties, after years in which it had failed to curb some of the most excessive risk-taking by the banks it supervises.
“Obviously, unemployment is the biggest problem we have,” he told the committee’s chairman, Barney Frank, Democrat of Massachusetts. “But there are difficult trade-offs that you have to make.”
Mr. Bernanke also agreed with Spencer T. Bachus of Alabama, the senior Republican on the committee, that huge long-term deficits could not be sustained. “In order to maintain a stable ratio of debt-to-G.D.P., you need to have a deficit that’s 2 ½, 3 percent at the most,” he said referring to the gross domestic product.
The current structural deficit, which government agencies estimate at from 4 percent to 7 percent of G.D.P., is unsustainable, Mr. Bernanke said.
He added: “It’s not necessarily just a long-term issue, because it is possible that bond markets will become worried about the sustainability, and we may find ourselves facing higher interest rates even today.”
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