WASHINGTON — Ben S. Bernanke, the Federal Reserve chairman, told Congress on Wednesday that the central bank did not intend to start raising short-term interest rates anytime soon, saying the economic recovery would remain halting for many more months.
In presenting the Fed’s semiannual monetary report to Congress, he did not waver from his recent statements on monetary policy. And the reassurance helped lift the stock market, even as a new report showed a drop in sales of new homes.
It was Mr. Bernanke’s first testimony since a grueling confirmation process ended last month, when the Senate gave him a second term as chairman by the narrowest margin in the Fed’s history.
In what appeared to be a deliberate response to the criticisms leveled at the Fed, Mr. Bernanke announced support for two measures to improve oversight of the extraordinary lending programs the Fed started in 2008.
In one of the moves toward openness, Mr. Bernanke said the Fed would back legislation requiring the eventual release of the names of borrowers that used the programs.
He also said the Fed had undertaken “an intensive self-examination” of its regulatory duties, after years in which it had failed to curb some of the most excessive risk-taking by the banks it supervises.
Members of the House Financial Services Committee seemed satisfied with Mr. Bernanke’s message and tone. The hearing was much more placid than the raucous Senate confirmation debate, in which lawmakers assailed Mr. Bernanke for failing to foresee and head off the financial crisis and for aiding the Treasury’s bailout of Wall Street.
The twice-a-year report is intended to draw focus to the central bank’s dual mandate: promoting maximum employment while keeping the inflation rate low and steady.
But many of the questions directed at Mr. Bernanke focused on the federal debt and deficits, or the difficulties small companies have had in obtaining loans and the bleak state of the commercial real estate market, areas over which he has little authority.
In contrast to his predecessor, Alan Greenspan, who frequently offered his thoughts on fiscal policy, Mr. Bernanke tried to deflect efforts to get him to endorse either additional fiscal stimulus or prompt deficit reduction.
“Obviously, unemployment is the biggest problem we have,” he told the committee’s chairman, Barney Frank, Democrat of Massachusetts. “But there are difficult trade-offs that you have to make.”
Mr. Bernanke also agreed with Spencer T. Bachus of Alabama, the senior Republican on the committee, that huge long-term deficits could not be sustained. “In order to maintain a stable ratio of debt-to-G.D.P., you need to have a deficit that’s 2 ½, 3 percent at the most,” he said referring to the gross domestic product.
The current structural deficit, which government agencies estimate at from 4 percent to 7 percent of G.D.P., is unsustainable, Mr. Bernanke said.
He added: “It’s not necessarily just a long-term issue, because it is possible that bond markets will become worried about the sustainability, and we may find ourselves facing higher interest rates even today.”
Three hours passed without any serious effort by lawmakers to get Mr. Bernanke to specify when the Fed might start to tighten credit. Nor did they question the Fed’s decision last week to raise the discount rate on loans it charges to banks, a largely technical but widely noticed step to normalize lending.
“Although the federal funds rate is likely to remain exceptionally low for an extended period, as the expansion matures, the Federal Reserve will at some point need to begin to tighten monetary conditions to prevent the development of inflationary pressures,” Mr. Bernanke said in testimony that accompanied the 53-page monetary report.
Jeffrey A. Frankel, an economist at the Harvard Kennedy School, said the appearance had a reassuring effect. “What he said probably allayed concerns that some segments of the market might have had about premature tightening of monetary policy,” he said.
Catherine L. Mann of the International Business School at Brandeis University said the biggest challenge the Fed faces is navigating the next financial bubble. “Whereas they want to keep interest rates low to stimulate Main Street, the reality is that low interest rates are mostly stimulating Wall Street,” she said.
Moving from monetary to regulatory matters, Mr. Bernanke said he supported greater transparency for the special lending programs the Fed created in 2008 to prop up securities firms, money market funds, and issuers of commercial paper and student, auto and credit card loans.
“While the emergency credit and liquidity facilities were important tools for implementing monetary policy during the crisis, we understand that the unusual nature of those facilities creates a special obligation to assure the Congress and the public of the integrity of their operations,” he said.
He said the Fed would disclose the identities of the borrowers after a “lag that is sufficiently long” to avoid hurting the companies, undermining market confidence or discouraging borrowers.
Mr. Bernanke also said he would support audits by the Government Accountability Office of how the lending programs were conducted.
But he defended the longstanding practice of not disclosing which banks borrow from the central bank’s discount window.
“The reason is that banks will only come to the discount window in a period of crisis or panic, and if they believe that their names will be revealed, that would indeed, in fact, intensify the crisis or panic,” Mr. Bernanke said.
During the financial crisis, the Fed helped arrange the sale of the investment bank Bear Stearns and the rescues of the American International Group and Citigroup. Those interventions are already subject to G.A.O. audits.
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