Federal Reserve Chairman Ben Bernanke addressed the House Budget Committee this morning and tried to ease their concerns about the possibility of accelerating inflation.
In his first hearing before the new Republican majority in the House, Bernanke said that "markets don't expect inflation."
Bernanke's comments did little to ease House Budget Committee Chairman Paul Ryan's (R-Wis.) concerns about the potential for a spike in inflation. Ryan expressed worry that the Fed might not notice a rise in inflation until it was too late, pointing to today's edition of The Wall Street Journal and a story entitled “Inflation Worries Spread.”
Bernanke responded by stating that "inflation is taking place in emerging markets because that’s where the growth is, that’s where the demand is and that’s where, in some cases, the economy is overheating." He also said that "overall inflation is still quite low and longer-term inflation expectations have remained stable.”
The Fed chief also talked about unemployment and the overall economy, offering a mixed take about growth. "Although the growth rate of economic activity appears likely to pick up this year, the unemployment rate probably will remain elevated for some time,” Bernanke said.
"Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” he added.
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