The U.S. economy appears to be in recovery but it likely won’t rebound as fast as the Federal Reserve Board would like, Fed chairman Ben Bernanke said Monday.

Speaking to the Economic Club of Washington, D.C., Bernanke said that while there has been some improvement in economic activity over the past year, “we still have some way to go before we can be assured that the recovery will be self-sustaining”, and it remains to be seen if the rebound will be strong enough to create new jobs and bring down the unemployment rate.

“Economic forecasts are subject to great uncertainty, but my best guess at this point is that we will continue to see modest economic growth next year–sufficient to bring down the unemployment rate, but at a pace slower than we would like,” he said.

He noted that the economy still faces “some formidable headwinds”, including tight credit conditions and the weak job market.

Additionally, the inflation picture faces conflicting pressures. But, on balance, Bernanke said it “appears likely to remain subdued for some time”. And, he tried to tamp down fears that the Fed’s activities to foster recovery could create inflation down the road.

In terms of regulatory reform, Bernanke stressed that: all systemically important financial institutions should be subject to strong, comprehensive supervision, along with tougher capital, liquidity, and risk-management requirements than other firms; that Congress should create a new resolution regime so that policymakers have an option other than a bailout or a disorderly, confidence-shattering bankruptcy when an important financial firm does face failure; and, the regulatory structure requires a better mechanism for monitoring and addressing emerging risks to the financial system as a whole.