Ben Bernanke, the Federal Reserve Chairman, renewed an assurance to prevent the European crisis from damaging the US economy in a testimony before Congress that corroborated remarks that he made last week. He affirmed that the Fed was in perpetual contact with European authorities and will continue to monitor the situation closely. Bernanke assured before the Congress-the Fed was ready to take every available step to stem the damage on the US financial system and its economy.

The Fed chairman maintained a cautious tone on the US outlook and did not get over-board with the surprisingly strong US jobs data released on Friday. He retained that the economy has a long way to go before the labor market can be said to be operating normally.

Bernanke also addressed the following major factors affecting the US economy at the moment during the hearing.

• Unemployment:

Bernanke exclaimed the monetary policy cannot do much to bring unemployment in a sustainable way below current levels. He said other policies including the structure of the labor market, fiscal policy, trade and the other policies could affect and bring down the current unemployment levels. He hoped that the Congress would consider ways to address this issue.

• Inflation:

Inflation had averaged about 2% a year over Bernanke’s tenure as chairman and he expects it to be at 2% or below in the next couple of years. He discarded any notion of prioritizing maximum employment. Bernanke re-affirmed that he was taking a balanced approach since the Congress gave the Fed a dual mandate of bringing both sides on a desired level.

The commodities prices including gold and silver rose as an affect of Bernanke’s testimony to the congress. The investors had parked their investments on the alternative assets as Bernanke hinted at a slower-than-desired recovery of the US economy.