: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