The performance of bonds — which can contain important clues about the economy's prospects — certainly should be looked at closely, but not in isolation, he said.
"Policy-makers should monitor bond yields carefully in judging the current state of the economy — but only in tandem with the signals from other important financial variables; direct readings on spending, production and prices and a goodly helping of qualitative information," the Fed chief said in a speech to the Economic Club of New York.
A copy of the speech was distributed in Washington.
"Ultimately, a robust approach to policymaking requires the use of multiple sources of information ... combined with frequent reality checks," he said.
Bernanke did not specifically discuss the Fed's next interest rate move in his speech or in a brief question and answer period afterward.
The Federal Reserve meets next week — Monday and Tuesday — to discuss interest rate policy. It will be Bernanke's first session as Fed chairman. Many economists are predicting interest rates will rise by one-quarter percentage point to 4.75 percent at that time.
The Fed under former chairman Alan Greenspan has been tightening credit since June 2004 to keep the economy in balance.
While economists and investors have different ideas about how many more interest-rate increases will come in the months ahead, many believe the Fed's rate-raising campaign will draw to a close this year.
In the speech, Bernanke talked about the bond market and its implications in terms of monetary policy.
"Clearly, bond prices, like other asset prices, incorporate a great deal of information that is potentially very relevant to policy-makers," Bernanke said. "However, the information is not always easy to extract — and, as in the current situation— the bottom line for policy appears ambiguous."
Although the Fed has been raising short-term interest rates for nearly two years, long-term rates, such as those on mortgages, have stayed relatively low. Greenspan once referred to this as a "conundrum."
Bernanke said a number of forces could be behind the low long-term rates, including an excess of savings in other countries looking for returns, strong demand from pension funds for longer-term bonds, a shortage of longer-term bonds or confidence in the Fed's ability to keep a lid on inflation. Depending on the explanation, there would be different implications for interest-rate policy.
He also repeated his view that the currently narrow differences between interest rates on longer-term bonds and interest rates on shorter-term instruments is not a harbinger of economic trouble ahead.
"I would not interpret the currently very flat yield curve as indicating a significant economic slowdown to come," he said.
Yields on 10-year Treasury notes stood at 4.66 percent Monday, while the yield on two-year notes was at 4.65 percent. Bond prices and yields move in opposite directions.
In late December, yields on 10-year notes dropped slightly below yields on two-year notes, marking the first time that had happened in five years. The phenomenon is called an "inverted yield curve" and in the past it has often preceded a recession.
Typically, longer-term instruments carry higher interest rates than shorter-term ones to compensate investors for tying up their money over a longer time frame.
During the question and answer session, Bernanke suggested the Fed also will be keeping a close eye on how the slowing housing market affects consumer spending, a key force of overall economic activity.
"There are some risks there. We don't know for sure whether the housing market will be in a moderate slowdown as we currently expect ... or whether it will be more significant," he said.
On another matter, Bernanke indicated China should do more to revamp its currency system. "China is working toward a more flexible system, but so far those steps are relatively modest," he said.