Bernanke Says Premature Rate Increases Could Choke Off Expansion

Federal Reserve Chairman Ben S. Bernanke said attempting to raise borrowing costs too soon could choke off the economic expansion as he pushed back against criticism that low rates are hurting people on fixed incomes and encouraging excessive risk-taking by investors.

“Premature rate increases would carry a high risk of short-circuiting the recovery, possibly leading -- ironically enough -- to an even longer period of low long-term rates,” Bernanke said today in a speech in San Francisco. “Only a strong economy can deliver persistently high real returns to savers and investors.”