Under occasionally testy questioning from House Republicans, Federal Reserve Chairman Ben Bernanke said the central bank is watching closely to make sure inflation doesn’t get out of control.
But in a tepid economic recovery with precious few jobs being created, Bernanke insisted that now is not the time to change course.
“We do not now have a problem,” Bernanke testified before the House Banking Committee, since inflation is “still quite low.”
Even as the Fed continues its controversial push to keep long-term interest rates down by buying $600 billion worth of government bonds, Bernanke reassured Republicans that he won’t be taking any prolonged vacations anytime soon.
“I do want to repeat that we are extremely vigilant,” he said. “We will be very careful to make sure that we don’t wait too long” before raising interest rates if necessary.
Many analysts agreed that inflation is not a major concern in the U.S., even as the price of gas has surged in recent weeks and food prices jump worldwide.
“I don’t think inflation is going to explode like wildfire and catch the Fed flat-footed,” Christopher Rupkey, an economist with Bank of Tokyo-Mitsubishi, told the Wall Street Journal.
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