Bernanke says China ready for yuan move

"I do believe they are now ready to go to a more flexible exchange rate regime and I would urge them to do that," Bernanke told a Senate Banking Committee hearing on his nomination to head U.S. President George W. Bush's Council of Economic Advisers.

"That would be part of the solution to move the U.S. back toward a more balanced trade position and reduced reliance on foreign borrowing."

"I don't think it's really the case that foreign central bank holdings of U.S. securities are the primary reason why our interest rates are as low as they are," he said.

"It is very important that the Federal Reserve remain independent of the administration in making monetary policy," Bernanke said when asked how much he might weigh in on monetary policy issues if confirmed for the White House job. "I do not expect to be involved in any of these issues."

"The labor market has improved quite a bit but I think we have some ways to go before we are at full employment," he said in answer to another question. "As the labor market strengthens, I believe we'll see real wages rising to match the gains in productivity."