WASHINGTON - Ben Bernanke said Wednesday that the U.S. economy is gradually improving but emphasized that the Federal Reserve is not locked into any timetable for scaling back policies aimed at jolting growth.
The Fed chairman told Congress there is no "preset course" and that any decision to reduce its $85 billion-a-month bond-buying program will depend on how the economy performs. And he said that the Fed could maintain or increase those purchases if it sensed the economy was weakening.
The bond purchases have kept long-term interest rates low and encouraged more borrowing and spending.
Chairman of the Federal Reserve Ben Bernanke testifies at a House Financial Services Committee hearing on Capitol Hill in Washington, Wednesday.
The U.S. economy is getting a lift from the recovering housing market and steady hiring, Bernanke said. But it is being held back by domestic spending cuts and slower growth abroad. The Fed is also closely monitoring inflation, which has fallen below the Fed's 2 percent target.
"Because our asset purchases depend on economic and financial developments, they are by no means on a preset course," he told the House Financial Services Committee during the first of two days of testimony this week on the Fed's semi-annual report. He will appear Thursday before the Senate Banking Committee.
His testimony helped stocks edge higher. The Dow Jones industrial average rose 19 points to close up at 15,470. Broader indexes also gained on the day.
The yield on the benchmark 10-year Treasury note fell to 2.49 percent, down from 2.55 percent before Bernanke's comments were made public.
Bernanke's remarks were his latest attempt to calm markets, which have gyrated wildly since the Fed's June meeting.