The top U.S. banking official in New York is defending Ben Bernanke after markets dropped following the Fed Chairman's remarks last week.

William Dudley, the president and CEO of the Federal Reserve Bank of New York, said markets overreacted. He said Bernanke was simply outlining how and when the central bank would wind down programs to stimulate the economy.

"I don't think the Chairman was trying to send any signal to the market," Dudley said. "I think the Chairman was just trying to elucidate, with a little bit more clarity, how the Federal Reserve would likely behave in terms of asset purchases if the economy evolved along a certain trajectory."

The stock market has soared in recent months in part because of the Fed's bond-buying programs - but Bernanke's statements caused investors to sell off stocks and bonds, sending the markets tumbling.