U.S. Federal Reserve Chairman Ben Bernanke on Friday defended the Fed's recent action to buy more government bonds plan and called on Congress to approve more fiscal stimulus to strengthen the economy.
Without more stimulus, high unemployment could persist for years, he said.
The Fed on Nov. 3 announced a 600-billion-dollar plan to purchase government bonds, the so-called second round of quantitative easing (QE2), which aroused criticism both internationally and domestically.
Bernanke argued that the Fed itself cannot fix all of the economy's problems, aiming to lower public expectations.
"There are limits to what can be achieved by the central bank alone," he said. "A fiscal program that combines near-term measures to enhance growth with strong confidence-inducing steps to reduce longer-term structural (budget) deficits would be an important complement to the policies of the Federal Reserve."
Bernanke said that the Fed's Treasury bond purchases are needed to promote faster job creation and reduce the risk that very low inflation could turn into deflation.
Deflation is a prolonged and destabilizing drop in prices of goods and services, wages and the values of assets like stocks or homes.
According to the latest data released by the U.S. Labor Department, the U.S. core consumer prices which exclude volatile energy and food prices in October increased only 0.6 percent on a year-on-year basis.
The unemployment rate, currently at 9.6 percent, was not expected to fall significantly soon.
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