Bernanke predicts slow, steady growth

Bernanke said the central bank "for an extended period" would stay its course with its key lending rate at zero to 0.25 percent. In addition, with the central bank's portfolio soaring from $800 billion to $2 trillion in the past two years, Bernanke said the Federal Open Market committee was exploring ways to reduce the bank's holding "to a more normal size and composition."

Policymakers, in other words, are not contemplating a return to purchasing securities to prop up markets.

Bernanke told members of the Senate Committee on Banking, Housing and Urban Affairs that most policymakers expected the economy to grow up to 3.5 percent in 2010 and up to 4.5 percent in 2011. Inflation was expected to remain low through 2011 and the unemployment rate was expected to drop to between 7 percent and 7.5 percent by the end of 2012, he said.

Currently, "The economic expansion that began in the middle of last year is proceeding at a moderate pace," he said.

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