Federal Reserve Chairman Ben Bernanke expressed concerns Wednesday about the economic recovery during a ceremonial swearing-in for another four-year term.
In brief remarks to staffers, Bernanke said that while the economy is growing, "far too many people remain unemployed, foreclosures continue at record rates and bank credit continues to contract."
One of the Fed's challenges is protecting its independence from congressional meddling, he said.
Another is making the Fed more open and accountable about its operations. And another is improving its oversight of banks. Lawmakers have complained about deficiencies in those areas.
The Fed "cannot hope" to solve the nation's economic problems on its own, Bernanke said. Both the nation and the central bank as an institution face enormous challenges, he said.
The closed-door event was held at the Fed's stately headquarters. Vice Chairman Donald Kohn administered the oath of office as Bernanke's wife, Anna, looked on. Because Bernanke's second term is a reappointment, he was not required to be sworn in again. His second term started Feb. 1.
Bernanke won Senate confirmation for a second four-year term last week — but only after being skewered by some lawmakers for helping rescue Wall Street while ordinary Americans suffered in recession. The 70-30 vote was the closest vote ever for the post.
Bernanke's confirmation battle has been a test of Fed independence. The central bank's decisions on interest rates carry immense consequences for the economy.
The anti-bailout anger that had eroded Bernanke's support in the Senate could have a lasting impact on the Fed's ability to manage the economy without regard to the political winds, economists and academics say.
The biggest challenge for Bernanke this year is deciding when and how to start boosting record-low interest rates and winding down other support programs, to prevent inflation or a speculative asset bubble.
Last week, the Fed pledged to keep rates at record lows near zero for an "extended period" to nurture the recovery. Some economists say that's at least six more months.
A scholar of the Great Depression, Bernanke, 56, has been widely credited for taking unconventional steps to prevent the Great Recession from turning into a second Great Depression.
Bernanke spent most of his professional career in academia, including 17 years teaching economics at Princeton University. He came to Washington to take a job at the Federal Reserve, working with Chairman Alan Greenspan.
President George W. Bush selected him to be his top economist. After that, he was sent to run the Fed starting in 2006.