With the economy sluggish and inflationary pressures limited, monetary policy remains focused on helping the economy recover, and “a highly accommodative stance of monetary policy will be appropriate for an extended period,” Federal Reserve Board chairman Ben Bernanke told Congress yesterday.

“However, we also believe that it is important to assure the public and the markets that the extraordinary policy measures we have taken in response to the financial crisis and the recession can be withdrawn in a smooth and timely manner as needed, thereby avoiding the risk that policy stimulus could lead to a future rise in inflation,” Bernanke testified before the House Committee on Financial Services, according to prepared text released by the Fed.

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