.... Federal Reserve Chairman Ben Bernanke said risks to both U.S. growth and inflation have increased...
.... There are ``significant downside risks to the outlook for growth,'' and ``upside risks to the inflation outlook have intensified...
.``Helping the financial markets return to more normal functioning will continue to be a top priority of the Federal Reserve,'...
.... Bernanke cited higher energy prices, reduced access to credit and a further deepening in the housing recession as dangers to growth. At the same time, he said: ``We must be particularly alert to any indications, such as an erosion of longer-term inflation expectations, that the inflationary impulses from commodity prices are becoming embedded'' in wages and prices....
``Inflation seems likely to move temporarily higher in the near term,'' Bernanke said.
``The effects of the housing contraction and of the financial headwinds on spending and economic activity have been compounded by rapid increases in the prices of energy and other commodities, which have sapped household purchasing power,'' Bernanke said.
Conclusion: `Clearly, policy is on hold,'' said Stephen Stanley, chief economist at RBS Greenwich Capital Markets in Greenwich, Connecticut, and a former Fed economist
Source: Bloomberg
.... There are ``significant downside risks to the outlook for growth,'' and ``upside risks to the inflation outlook have intensified...
.``Helping the financial markets return to more normal functioning will continue to be a top priority of the Federal Reserve,'...
.... Bernanke cited higher energy prices, reduced access to credit and a further deepening in the housing recession as dangers to growth. At the same time, he said: ``We must be particularly alert to any indications, such as an erosion of longer-term inflation expectations, that the inflationary impulses from commodity prices are becoming embedded'' in wages and prices....
``Inflation seems likely to move temporarily higher in the near term,'' Bernanke said.
``The effects of the housing contraction and of the financial headwinds on spending and economic activity have been compounded by rapid increases in the prices of energy and other commodities, which have sapped household purchasing power,'' Bernanke said.
Conclusion: `Clearly, policy is on hold,'' said Stephen Stanley, chief economist at RBS Greenwich Capital Markets in Greenwich, Connecticut, and a former Fed economist
Source: Bloomberg
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