Bernanke pushes back on QE3 Low interest rates from the US Federal Reserve make it easier and not harder to cut the budget deficit, according to its chairman Ben Bernanke, rejecting one of the main Republican criticisms of the central bank. In a speech at the Economic Club of Indiana on Monday, Mr Bernanke pushed back against opponents of the Fed's new, open-ended round of quantitative easing, under which it will buy $40bn of mortgage-backed securities a month. Mr Bernanke said the argument that he should raise interest rates in order to force Congress to tackle the deficit was "unpersuasive," putting him in direct conflict with Mitt Romney, the Republican presidential candidate. "Using monetary policy to try to influence the political debate on the budget would be highly inappropriate," said Mr Bernanke. For what it's worth, I think the strategy would also likely be ineffective. Mr Bernanke said that increasing interest rates would increase the deficit because of a weaker recovery in tax revenues and more expensive government borrowing. "It seems likely that a significant widening of the deficit - which would make the needed fiscal actions even more difficult and painful - would worsen rather than improve the prospects for a comprehensive fiscal solution," he said. Last week Mr Romney said that the Fed was keeping interest rates "artificially low." He said that when the government borrowed, the Fed "takes it and puts it in their pocket, basically printing more money." Although Mr Bernanke was appointed by Republican President George W. Bush, his comments risk drawing him further into the election debate by giving Barack Obama, theDemocratic president, weapons with which to attack his opponent. Mr Bernanke also swung at two other criticisms from Mr Romney: that low interest rates hurt the income of savers and increased the risk of long-term inflation. He said that many savers were also workers or homeowners, and the only way to address all of their concerns was to deliver strong growth. "Only a strong economy can create higher asset values and sustainably good returns for savers," he said. He emphasised that the Fed did not plan to keep the Treasury securities it has bought forever, which would risk stoking inflation. At the appropriate time, the Federal Reserve will gradually sell these securities or let them mature, as needed, to retun its balance sheet to a more normal size. Mr Bernanke also addressed the "Audit the Fed" bill proposed by Ron Paul, the Republican congressman from Texas, which has passed the House of Representatives. He said that letting the Government Accountability Office review Fed decisions, "could be seen, with good reason, as efforts to bring political pressure to bear on monetary policy makers." "A perceived politicisation of monetary policy would reduce public confidence in the ability of the Federal Reserve to make its policy decisions based strictly on what is good for the economy in the longer term," he said.