Federal Reserve Chairman Ben S. Bernanke defended the central bank’s unprecedented asset purchases, saying that they are supporting the expansion with little risk of inflation or asset-price bubbles, Bloomberg News reported yesterday. "We do not see the potential costs of the increased risk- taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery," Bernanke said yesterday in testimony to the Senate Banking Committee. "Inflation is currently subdued, and inflation expectations appear well anchored." Bernanke used his testimony to push back against colleagues on the Federal Open Market Committee who favor curtailing the $85 billion in monthly bond-buying amid concern about the growth of the Fed’s record $3.1 trillion balance sheet. He also differed with senators who said the central bank was engaged in a "currency war" and said he continues to work on ensuring that even the largest financial institutions do not get special status as being too big to fail.
