We've "enjoyed broad price stability" since inflation went south in the 1990s, Bernanke said.
Employment, by contrast, is "a grave concern." Cheaper money, he said, should attract more Americans to buy homes and hire workers.
Will that work? And is it really Bernanke's goal?
Afraid to hire?
Despite all the hype, "The Federal Reserve has a minimal impact on economic activity," wrote veteran bank analyst Richard X. Bove, in a report to clients of Rochdale Securities, before Bernanke spoke. Even federal tax policy doesn't seem to affect what companies do, he added, noting that the economy grew faster under tax-boosting Presidents George H.W. Bush and Bill Clinton than under tax-cutting George W. Bush.
The Fed has already replaced foreign investors as the leading buyer of government debt, even as private-sector borrowers have mostly used the resulting cheap money to pay down existing debt, instead of buying or hiring more, Bove added.
So, Bove wrote, the Fed "has been funding the government, not the economy."
In buying mortgage-backed securities, the Fed takes pressure off major home lenders like JPMorgan Chase & Co., Wells Fargo Bank and Bank of America and mortgage financiers like Fannie Mae, which have been fighting over who has to eat the losses from hundreds of billions in bad mortgage loans from the mid-2000s.
But the Fed's latest moves will likely have "almost no impact on loan demand, both business and consumer," Ted Peters, chief executive at Bryn Mawr Trust Co., said. "I hope I'm wrong, [but] rates are so low now that I can't imagine another 10-15 basis-point drop would move the needle much," Peters said.
"It's a great time to buy a home, [but many] people who want to take advantage of lower interest rates simply can't" - because they have questionable credit, and bank regulators are pushing lenders not to make "low or medium-quality loans," says James M. Meyer of Tower Bridge Advisors, West Conshohocken, in reports to clients of stockbrokerage Boenning & Scattergood.
"People are still afraid to hire," Gerry Banmiller, president of Collingswood-based 1st Colonial National Bank, said.
"Monetary and fiscal policy will not turn this economy around," Banmiller said. What to do? "Stop scaring employers with too many regulations."
Banmiller wants to scale back President Obama's proudest achievements - reduce employer medical-insurance mandates and "cancel" strict new pro-consumer bank rules, at least for community banks like his. "I've had to spend $100,000 a year on an extra compliance officer," Banmiller said. "I wish I could have hired another small-business lender instead."
Victor Li, a former Fed senior economist who is now a professor at Villanova University, says past Fed bosses who favored job growth have ended up feeding inflation by boosting public expectations that prices will rise.
Li does see a potential major benefit to the Fed's latest move: Cheap money makes it easier for Congress and the president to cut the federal deficit, which has threatened to drop the value of the dollar against other currencies and drive consumer prices higher.
In the late 1970s and 1980s, then-Fed boss Paul Volcker's high-interest-rate policy joined with President Ronald Reagan's initial budget cuts to squeeze business into a deep recession.
Today, damage from government-spending cuts or tax hikes is less, because money is Bernanke-cheap, at least for solvent borrowers. So the lower interest rates go, the lower the "political costs" of balancing the budget, Li said.
But we still need Congress and the president to agree on what to tax and what to spend. Dirt-cheap money hasn't made that happen yet.
Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, or @PhillyJoeD on Twitter.