5 June 2008
Inflation Woes
Posted by Joy Bischoff under: World Economy .
Bernanke Says Rise in Price Expectations a `Concern’
By Craig Torres
June 4 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke said while rising public expectations for inflation are a “significant concern,” there’s little sign of the pressures that drove price increases above 10 percent in the 1970s.
“Some indicators of longer-term inflation expectations have risen in recent months, which is a significant concern” for the Fed, Bernanke said today in a speech during a Class Day ceremony at Harvard University in Cambridge, Massachusetts. Policy makers “need to monitor that situation closely.”
Signs of increasing prices compelled Bernanke and other Fed policy makers to signal in April they’ll pause after reducing the benchmark interest rate by 3.25 percentage points since September. The Fed is trying to sustain economic growth and minimize harm from the collapse of the subprime mortgage market without impairing its credibility on inflation.
Bernanke’s remarks focused on the differences between the U.S. economy now and in the 1970s. The combination of a housing slump and slow growth along with surging food and energy costs has prompted economists to resurrect the term “stagflation,” first used in the 1960s to describe a mix of slow growth and rising prices.
2 Comments so far...
Nalvy Says:
5 June 2008 at 2:22 pm.
I dont really know about the economy and all but i have been trying to watch the news to figure out what i can and I heard about the economy being like the 70’s.
It really freaks me out being on my own you know?
Iffer Says:
5 June 2008 at 5:27 pm.
Yeah Nalvy i think anyone who knows anything is freaked out. Some people just try and ignore it like it will go away, but its not. We all need to be prepared.
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