Federal Reserve Chairman Ben Bernanke defended the central bank's record on keeping inflation low, in the face of criticism that the central bank's weak-dollar policies have driven up consumer prices.
Speaking at a post-Fed meeting news conference, Bernanke rejected claims that the Fed's various moves to keep interest rates low and monetary policy accommodative will lead to high levels of inflation .
"I would simply point to the record. For the last five years inflation, although it's been volatile because of commodity price fluctuations, has averaged about 2 percent, which is close to a reasonable definition of price stability, whereas the area that we have fallen short obviously is on the unemployment side.
"So I think criticisms based on the concern about inflation have so far at least not proved to be very valid," he added.
Bernanke addressed reporters just after the central bank's Open Market Committee agreed to keep its funds rate target near zero, though it did not approve additional easing measures.
Congressional Republicans and GOP presidential candidates have frequently targeted Bernanke for failing to control inflation, with some, such as Texas Rep. Ron Paul, calling for the Federal Reserve to be abolished.
Bernanke refused to get too far into the politics but said the committee is comfortable with the current level of inflation, which is around 2 percent excluding volatile food and energy prices but 3.9 percent including gasoline, groceries and similar items.
He said earlier price spikes were due to the Japan tsunami and earthquake and other such "transitory" matters.
"Inflation appears to have moderated as those transitory influences have waned and as low levels of resource utilization constrained rises in prices and wages," Bernanke said. "Furthermore, survey measures and market indicators imply that longer-term inflation expectations have remained stable."
Bernanke said the committee expects inflation to amp up slightly to 2.7 to 2.9 percent this year, but then to dissipate to 1.4 to 2.0 percent in 2012.
But the Fed's forecasts have been inaccurate over the past year, with the predictions overstating the ability of the economy to rebound and understating damage caused particularly in housing and the European debt crisis.
He attributed the problems with the growth forecasts in part to "some elements of bad luck."
"I think it's clear that in retrospect that the severity of the financial crisis and a number of other problems including the dysfunction in the housing market have been more severe and more persistent than we initially believed," Bernanke said.
Addressing other issues, Bernanke said he understands the Occupy Wall Street protest movement though he said the Fed shouldn't be blamed for trying to save the financial system.
"We now have a more unequal society than we've had in the past. I fully sympathize with the notion that the economy is not performing the way we would like it to be," he said. "What we were doing is trying to protect the financial system in order to prevent a serious collapse of both the financial system and the American economy. We needed to take those steps and if we hadn't taken them the consequences would have been dire. Not everybody understands that."
Yet he acknowledged that the Fed's policies have not been as successful in trying to revive the moribund housing market.
The Fed's various easing measures and purchases of mortgage-backed securities have driven lending rates to record lows while housing continues to languish.
"Monetary policy may be somewhat less powerful in the current context than it has been in the past," he said.