Washington, Jul 19 (IANS): US Federal Reserve chairman Ben Bernanke Thursday said recent financial tightening which is associated with the rise in interest rates is "unwelcome".

In his testimony to the Senate Banking Committee, Bernanke said there are three main reasons for the rise in longer-term interest rates, which he thought was relatively low, reported Xinhua.

He cited better economic news as the first reason. "As investors see brighter prospects ahead, interest rates tend to rise," said Bernanke.

And the second reason is probably the "unwinding of leveraged, and perhaps successfully risky positions in the market".

"It's probably a good thing to have that happen, although the tightening that is associated with that is unwelcome," he told the senators.

"But at least a benefit of it is that some concerns about building financial risks are mitigated in that way," he added.

The third reason, he noted, is related to the Fed's communications and market interpretations of Fed policy.

"We are not talking about tightening monetary policy," Bernanke said, noting that the central bank has merely been trying to lay out the sequence about how it is going to move and how that will be tied to the economy.

"But I want to emphasize that none of that implies that monetary policy will be tighter at any time within the foreseeable future," he said.