But the midpoint of your inflation projections are below your 2 target through 2016. Is that inconsistent with the lift off during that time. Is there a case that your threshold should be supplemented with a lower balance right, you wont taken if inflation is at or below some lower balance . In the latter part, of course you are seeing interestrate projections and inflation projections separately. Each individual making their own projection. I think you are right i. That is one of the reasons that i think we can be very patient in raising the federal funds rate as we have not seen any inflation pressure. Im having an inflation floor. That would be in addition to the guidance we are discussing how we might clarify the guidance on the federal funds rate. That is certainly one possibility. I guess an interesting question there is whether we need Additional Guidance on that given that we do have a target, and of course implicit in our policy strategy is trying to reach that target for inflation. And inflation floor is certainly something that could be a sensible modification or addition to the guidance. Dow jones newswire. Many investors were expecting the fed to move at least a little bit in pulling back the bond buying project today. Given that you all decided not to do that, do you have any concerns that to once again the fed is confusing investors and sending mixed signals . Ben bernanke well, dont believe i recall stating we would do anything in particular in this meeting. What we will do is the right thing for this economy. Our assessment of the data since june is that taken collectively, didnt quite meet the standard of satisfying or ratifying or confirming our basic outlook of increasing growth, increasing labor markets and inflation moving back towards targets. We try our best to communicate, the market will continue to do that, we cannot let market indicate our actions. It has to be indicated by this assessment of what is needed for the economy. [inaudible] peter barnes, fox business sir. You mentioned fiscal issues in a statement today. Are you concerned of a Government Shutdown . We are hearing about that possibility. Did that come up in your discussions at this meeting of what do you think would be the impact of a Government Shutdown on the economy and what could the fed, with the fed be prepared to respond to that and help the economy with additional accommodation for example additional asset purchases. Thank you. Bernanke a factor that did concern us in our discussion was upcoming fiscal policy decisions. I would include the possibility of Government Shutdown, but also the debt limit issue. These are obviously part of a very complicated set of legislative decisions, strategies, battles, et cetera. Which i wont get into, but it is the case, i think, that a Government Shutdown and perhaps even more so a failure to raise the debt limit could have very serious consequences for the Financial Market and for the economy. The Federal Reserve policy is to do whatever we can to keep the economy on course. So if these actions let the economy to slow, we would have to take that into account, shirley. This is one of the risks we are looking at when we think about policy. That being said, again our ability to offset these shocks is very limited particularly a debt limit shock and it is incredibly important that congress and the Administration Work together to find a way to make sure the government is funded, having services are provided. The government pays his bills and avoid an event like 2011 which had at least for a time in noticeable adverse effect on confidence and the economy. Cnn money. This year marks five years since the financial crisis began. Hank paulson, who youve worked very closely with, says his biggest regret was he was unable to convince the American People that was was done were not from wall street, they were from main street. What is your biggest regret as reflect on the five year anniversary, and th you believee fed, congress and the president , have put the necessary measures in place to prevent another deep financial crisis . Bernanke on regrets as Frank Sinatra says, i have many. The biggest regret i have is we didnt forestall the crisis. Once the crisis got going, it was extremely hard to prevent. I think we did what we could given the powers that be had, i would agree with hank that we were motivated entirely by the interest of the broader public that our goal was to stabilize the Financial System so that it would not bring the economy down. So that it would not create massive unemployment and Economic Hardship that was even more, would have been even more severe by many times than what we actually saw. So i agree with him on that. Since you gave me the opportunity, i would mention of course all the money that was used in those operations has been paid back with interest and so it hasnt been costly even from a fiscal point of view. In terms of progress, that is a good question. I think we have made a lot of progress. We had doddfrank passed in 2010, and recently have come to agreement internationally on a number of measures including other agreements relating to the shadow Banking System and other aspects of the Financial System the it i think today our large Financial Firms are better capitalized by far than they were certainly during the crisis and even before the crisis. Supervision is tougher. We do stress testing to make sure firms can withstand that only normal shocks but very large shocks similar to those experienced in 2008. Very importantly we now have a tool we didnt have in 2008 which would have made a significant difference if we had it, which is the Liquidation Authority the dodd frank bill gave to the fdic in collaboration with the fed. The fdic with other agencies has the ability to wind down a failing Financial Firm in a way that minimizes the direct impact on the Financial Market and on the economy. I dont want to overstate the case. Theres a lot of more work to be done. The United States has set the course internationally. Other countries and International Bodies are setting up standards for resolution regimes which are very select those in the United States making the better cooperation across borders. We are still some distance from being fully geared up to work with foreign counterparts to successfully wind down and international, multinational Financial Firm. We made progress in that direction, but we need to do more, i think. There is more to be done on derivatives, although there has been a lot done to make the trading derivatives safer. It is going to be probably sometime before all of this stuff that has been undertaken, all of these measures are fully implemented and we can assess the ultimate impact on the Financial System. Mr. Chairman. A numbe number of economies andd some of your fed colleagues have argued that the effectiveness of quantitative easing has greatly diminished if not disappeared. And they point to the recent performance of the economy as proof of that. There have been a number of people who argue there are regulatory and other impediments beyond the reach of Monetary Policy. To what extent are these valid arguments and if the economy does not speed up, does not reach your objectives, how will you ever get out of quantitative easing . Bernanke on the effectiveness of our asset purchases, it is difficult to get a precise measure. Theres a large academic literature on this subject and a range of results, some suggesting this is a quite powerful tool, some that it is less powerful. My own assessment is that it is effective. You see that some of the strongest sectors, the leading sectors have been intersected sectors and they have been successful strengthening financial conditions thereby promoting recovery. So i do think i have been effective. You mentioned the hasnt been any progress. There has been a lot of progress as i said in the beginning labor market indicators while still not where we would like them to be are much better today than where we began the latest program a year ago. Importantly as referenced in our statement, that happened not withstanding a set of fiscal policies that would cost between 11. 5 Percentage Points of real growth and hundreds of thousands of jobs. So the fact we have maintained improvements in the labor market that are as good or better than the Previous Year notwithstanding this fiscal drag is some indication that there is at least a partial offset from Monetary Policy. As you say there are a lot of things in the county Monetary Policy cannot address. Include the effectiveness of regulation, they include fiscal policy, they include developments in the private sector. We do what we can do, and if we can get help, we are delighted to have help from the policymakers in the private sector and we hope that will happen. The criterium for ending asset purchases is not some high rate of growth. What it is is criteria substantial improvement in the outlook for the labor market and we have made significant improvement. Ultimately we will reach that level of substantial improvement and at that point we will be able to wind down the asset purchases. Again, and i think people dont fully appreciate that we have two tools, asset purchases and rate policy and guidance about rates, it is our view the rate policy is actually the stronger more reliable tool and when we get to the point where we are close enough to full employment rate policy will be sufficient, i think we will still be able to provide even if asset purchases are reduced we can provide a highly accommodative monetary background that will allow the economy to continue to grow and move toward full employment. American banker. The Financial Oversight Council has designated a couple nonbank citizens and others to follow. However little has been said for how specifically these firms will be regulated by the fed which has been achieved criticism of the entire process. Given that, can you provide us any guidance at this point in terms of how far along the fed is in terms of letting the banks know how they will be regulated besides tailoring the plan . Bernanke the two firms that have been designated, aig and ge capital have been recommended by the fed because both of them are savings and loans thrift Holding Companies so we have a lot of already experience with those firms and contact with those firms. I want to use the word tailored because they want to design a regime appropriate for the Business Model and the particular firm, but our other objective and what makes designation particularly noteworthy is that the primary goal of the supervision by the fed is to make sure that the firms doesnt endanger the broad Financial System. So we will be looking at not just the usual safety and soundness type matters or supervision, which both can be again tailored to the types of assets and liabilities the firm has, but also we are going to want to focus on things like resolution authority, practices relating to derivatives and other exposures, interconnectedness, et cetera to make sure the firm in its structure and operations doesnt pose a threat to the wider system. That is what is going to be distinctive about our oversights not only of these designated firms but also the large bank Holding Companies that we already oversee and are already subjecting to tougher supervision and higher capital stress test and all the rest. Mr. Chairman, one of my colleagues was remarking as we came in here we dont often get surprises from the Federal Reserve. This was a surprise. He talked about you hadnt telegraph anything specifically but you had seen the market reaction, i am sure. Are you intending a surprise today and did you get the intended result hashtag and taking the action of the bond purchases going forward, what point do you believe youre starting to complicate the exit strategy simply by continuing to keep the fed foot on the gas pedal to you make life more, candidly Federal Reserve down the road . Bernanke it is our intention to try to set policy as appropriate for the economy as i said earlier. We are somewhat concerned. I wont overstated, but we do want to see the effects of higher Interest Rates on the economy, particularly Mortgage Rates on the housing. The extent our policy makes conditions today makes conditions just a little bit easier, that is desirable. He wants to make sure the economy has adequate support and in particular less surprising the market or easing policy as it is avoiding a tightening until we can be comfortable the economy is in fact growing the way we want it to be growing. This was a step, a precautionary step, if you will. It was the intention is to wait a bit longer, and to try and get confirming evidence to whether or not the economy is in fact conforming to this general outlook that we have. I dont think that we are complicating anything for future fomc. We have developed a variety of tools, and we think we have numerous tools that can be used to both manage Interest Rates and to ultimately unwind the Balance Sheet when the time comes. I feel quite comfortable that we can raise Interest Rates at the appropriate time even if the Balance Sheet remains large for an extended time. That would be true of course for future as well. Mr. Chairman, from politico. Do you think all the attention being paid to who will be your replacement has had any immediate effect on the fed and could it have any lingering affect on your successor and also did in the process we come to politicize or is this part of a healthy debate . The Federal Reserve has strong institutional credibility and it is a strong institution, highly Competent Institution and it is independent, nonpartisan. Im not particularly concerned about the political environment for the Federal Reserve. I think the fed will continue to be an Important Institution in the United States and it will maintain its independence going forward. Thank you, mr. Chairman. From marketwatch. Was there discussion amongst the committee for change and afford guidance to 6. 5 jobless rate and could you say why the committee decided to hold that study . In light of the weaker economy. Bernanke as i mentioned earlier the committee has regularly reviewed the Forward Guidance, and there are a number of ways in which the Forward Guidance could be strengthened. For example, inflation floor, there are other steps we can take, we can provide more information of what happens after he gets to 6. 5 in those sort of things. The extent we can provide precise guidance, that would be desirable. Now it is very important we not take any of these steps lightly. We understand all the implications and that we are comfortable it will be, any modifications of the guidance will be credible to the market and to the public. We continue to think about options, a number of options we have talked about, but today, as of today we did not choose to make any changes to the guidance. L. A. Times. As you may know, the Census Bureau reported yesterday that the poverty rate in the Median Household Income saw no improvement last year. Wonder when you see Median Income turning up significantly for most people, and in light of the fact people in the middle and the bottom have seen very little of the gains relative to higher income households, how would you assess the quantitative easing and fed policies . So that is certai certainly e there are too many people in poverty. There are a lot of complex issues involved. There are complex measurement issues. I would just have to mention that. There are a lot of issues that are really longterm issues as well. For example, it might seem a puzzle that the u. S. Economy gets richer and richer, and yet there are more poor people. The explanation of course is our economy is becoming more unequal. More very rich people and people in the lower half who are not doing well. There is a lot of reasons behind this trend which has been going on for decades, and economists disagree about the relative importance of things Like Technology and International Trade and unionization and other factors that have contributed to that. My first point is the longrun trends it is important to address these trends but the Federal Reserve does not have the tools to address the long run distributional trends. They can only be addressed by congress and the administration. It is up to them to take those steps. The Federal Reserve, we are doing our part to help the median family, the median american. Because one of our principal goals, we have two principal goals. Maximum employment, jobs. The best way to help families is to create employment opportunities. We are still not satisfied with where the labor market, the job market