Short-term interest rates have been near zero for more than three years and are likely to stay near zero for years to come.
But despite recent signs of modest economic improvement, Federal Reserve chief Ben Bernanke says rates still might be too high. The problem, of course, is that rates can't go any lower.
"It is arguable that interest rates are too high, that they are being constrained by the fact that interest rates can't go below zero," Bernanke said in testimony Wednesday to the House Financial Services Committee.
The below-par economic recovery "suggests that interest rates in some sense should be lower rather than higher. We can't make interest rates lower, of course. (They) only can go down to zero."
Bernanke offered some sympathy to savers who are suffering from bank accounts that return far less than 1 percent, but he said the best way to improve the situation is to restore the economy to full health.
"Remember, people also own equities, they own money-market funds, they own mutual funds, they have 401(k)s and a variety of things, and those assets are assets whose returns depend very much on how strong the economy is," he said. "So in trying to strengthen the economy, we are actually helping savers by making the returns higher as we can see in the stock market, for instance."
The stock market, which has rallied to its highest levels in nearly four years, was off a bit Wednesday, one day after the Dow closed above the psychologically key 13,000 level.
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