Federal Reserve chairman Ben Bernanke gave quantitative easing credit for fostering growth in the housing market while speaking to the Economic Club of Indiana in Indianapolis.

Since Bernanke made the controversial decision in September to purchase mortgage-backed securities at the pace of $40 billion per month, he has received both praise and criticism for using aggressive monetary tools to keep interest rates low and spur demand in areas like housing. The plan fell in line with previous attempts by the Fed to use monetary tools to keep low interest rates long-term to help spur economic activity. 

James Frischling, president and co-founder of NewOak Capital, even suggested at one point that the Fed is leaning on a housing recovery as a means to stimulate employment in construction and other related industries.

Bernanke seemed to confirm those sentiments Monday, telling the Indianapolis crowd that low mortgage rates are behind recent signs of housing improvement.

"Other important interest rates, such as corporate bond rates and rates on auto loans, have also come down," Bernanke said. "Lower interest rates also put upward pressure on the prices of assets, such as stocks and homes, providing further impetus to household and business spending.

The Fed chairman also acknowledged concerns that QE3 and low interest rates might spar inflation in the future.

"For controlling inflation, the key question is whether the Federal Reserve has the policy tools to tighten monetary conditions at the appropriate time so as to prevent the emergence of inflationary pressures down the road," Bernanke said. "I'm confident that we have the necessary tools to withdraw policy accommodation when needed, and that we can do so in a way that allows us to shrink our balance sheet in a deliberate and orderly way."

The Fed chair also elaborated on what the Fed's role is and how that compares to the role of policymakers in Congress.

"Even though our activities are likely to result in a lower national debt over the long term, I sometimes hear the complaint that the Federal Reserve is enabling bad fiscal policy by keeping interest rates very low and thereby making it cheaper for the federal government to borrow," Bernanke said. "I find this argument unpersuasive. The responsibility for fiscal policy lies squarely with the administration and the Congress. At the Federal Reserve, we implement policy to promote maximum employment and price stability, as the law under which we operate requires. Using monetary policy to try to influence the political debate on the budget would be highly inappropriate."