Actual Headline! "Bernanke: Energy Prices Increase Risk Of Inflation"

[hatrack]

:silly:

Federal Reserve Chairman Ben Bernanke on Monday said the danger of the economy entering a "substantial downturn" had eased in the past month or so despite last week's unexpected jump in unemployment. But he cautioned that soaring energy prices are creating new inflation risks that the Fed will "strongly resist."

Bernanke's remarks, prepared for a conference in Massachusetts, underscore the Fed's growing inflation worry, with oil prices over $130 a barrel and gas averaging more than $4 a gallon. Crude oil had its biggest one-day rise on Friday, topping $139 before settling back in Monday trading.

Central bank officials since last September have aggressively cut a key interest rate to bolster the faltering economy. The challenge for the Fed is to ensure it doesn't keep rates too low, too long, and feed inflation pressures. Bernanke noted the slow economy has so far limited companies' ability to pass on rising prices, while leaving workers with little leverage to push for pay increases. "The continuation of this pattern is not guaranteed," he cautioned the Boston Fed's economics conference.

"The latest round of increases in energy prices has added to the upside risks to inflation and inflation expectations," Bernanke said. The Fed will "strongly resist" an erosion of longer-term inflation expectations.

EDIT

http://www.usatoday.com/money/economy/2008-06-09-bernanke_N.htm

[kestrel91316]

1. I wonder what tricks the Fed has up its sleeve to weaken the dollar further?

Because that's all they seem to be able to do lately........

[DJ13]

2. Sheer brilliance!

How much do they pay that idiot for his wisdom?

[On the Road]

3. What About This is Stupid?

General inflation has not reflected anything like the huge increase in oil prices so far.

If it does, watch out. That's what he's saying.

Bernanke noted the slow economy has so far limited companies' ability to pass on rising prices, while leaving workers with little leverage to push for pay increases. "The continuation of this pattern is not guaranteed," he cautioned....

[hatrack]

4. Well, I thought its general blatant 50-foot-letters-of-fire obviousness was rather, uh . . .

"stupid", when you get right down to it.

[On the Road]

5. A Rise in Any Single Commodity

is not usually thought of as inflation.

Do you think that other prices have reflected the changes in oil? They haven't (in fact it's been relatively moderate), largely because businesses have not been able to pass on their own costs to their customers.

If that changes, and general inflation starts to reflect trends in oil prices, that is a very different thing.