The Federal Reserve chair on Wednesday said the US should push for more fiscal restraint and greater investment in infrastructure.
Bernanke, who has made it clear he would not seek re-election, made his remarks in response to questions from senators about the possibility of a future financial crisis in the United States.
Bernackers comments came as Senate Banking Committee Chairman Richard Shelby (R-Ala.) sought to put pressure on the Fed chair over the likelihood of a looming crisis.
“I think the Fed’s central role in the economy is important, but we can’t forget that the economy also depends on the fiscal policy decisions that are made,” Shelby told reporters.
Bernanks comments follow an increase in concern over the countrys fiscal outlook, following his testimony earlier this week.
On Wednesday, Bernanke made it a priority to keep the USs fiscal deficit within the bounds of 3% of gross domestic product (GDP).
The Fed chair said the “deficit is a function of two things: debt and spending.
If we want to reduce the deficit, we have to keep spending up and increase debt.
That’s a central role of fiscal policy.”
Bernanke also said the Fed would be willing to use its monetary authority to support the US economy if needed, and would also consider other tools to keep deficits from rising.
Berns comments came just days after the Fed signaled it would continue to buy long-term Treasury bonds and mortgage-backed securities to ease the blow of an economic downturn.
Berners remarks came after Senate Banking Chairman Richard Clyburn (D-S.C.) also urged Bernanke to keep his rhetoric about fiscal restraint on the record.
Bernks comments come days after Bernanke said he would keep his comments about fiscal stimulus “on the record” after lawmakers grilled him about the financial crisis.
Bernays comments follow a recent increase in financial and business confidence in the US and the possibility that the Federal Reserve will increase its interest rate to a rate close to zero in the near future.
Bernans comments follow the Fed meeting on Wednesday morning, which was called by President Donald Trump after Congress failed to pass a debt ceiling increase and a stopgap spending bill for the next few weeks.
Bernas comments came amid the heightened political and economic climate after lawmakers failed to reach an agreement on a short-term spending deal.