Earlier in the questioning, Bernanke said that accommodative monetary policy has not meant a trade-off between the Fed's dual mandate to promote maximum employment and keep inflation in check. "It has supported real growth in employment and kept inflation close to our target," he told the Senate panel.



When it comes time to start unwinding the bond-buying program, Bernanke said that it's unlikely the Fed will have to liquidate a large portion of its bond portfolio. "We could exit without ever selling by letting it run off and we could tighten policy by raising interest rates we pay on reserves," Bernanke said. But he added that the Fed was likely to sell slowly with plenty of guidance about its intentions.

Furthermore, Bernanke expects that quantitative easing to benefit government coffers. "The Federal Reserve's balance sheet policies are with very high probability going to be a very significant boon to the taxpayer in terms of returns to the Treasury," he said.

There was also a feisty exchange between Bernanke and Sen. Elizabeth Warren, a Democrat from Mass. and Wall Street critic, who pressed the Fed chairman on getting rid of "too big to fail" in the financial industry.

While Bernanke told Congress that ending too big to fail was incredibly important and steps have been taken, Warren pressed Bernanke on when it would actually end.

"Over time you'll see increasing market expectations that these institutions can fail," Bernanke said. The Fed chairman also predicted that the benefits of being large are likely to decline over time and that some banks would voluntary reduce their size.