Washington on Thursday, the Federal Reserve Chairman emphasized the importance of setting the US fiscal policy on a sustainable path. “Interest rates can sour quickly if investors lose confidence in the ability of the government its fiscal policy,” he pointed out.

Bernanke warned that the pace of recovery in the US was “frustratingly slow” and that reducing debt should be of crucial importance, as its current levels make the economy more susceptible to shocks. The Chairman emphasized that attaining a sustainable government debt to national income ratio should be a top priority on the fiscal policymakers agenda.

Bernanke also listed the Eurozone crisis as an important risk to the US economy. He said that all the necessary steps will be taken to protect the US financial system from the fallout.