Addressing an economists' conference in Atlanta on Sunday, Fed Chairman Ben Bernanke said the U.S. economy is only now recovering from recession, and Fed Vice Chairman Donald Kohn warned the pace of recovery will be slow. (Emphasis added)

Bernanke said that vigorous financial regulation would have been the best way to restrain the housing boom that helped cause the deep recession but said policy makers can no longer rule out monetary policy to curb the buildup of risk.

In a speech defending the Fed's rock-bottom interest rates in the early 2000s, a policy some say spurred a surge in home values, Bernanke said the blunt instrument of rate hikes would have been ineffective in checking the run-up in house prices.

Bernanke and the Fed face sharp criticism for failing to anticipate and prevent the crisis, even as he draws accolades for his handling of the meltdown. (Emphasis added) Bernanke's renomination as Fed chairman faces an unusual degree of opposition, and the Fed's responsibilities stand to be curtailed if congressional proposals become law.

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