Ben Bernanke Defends QE2, Not Worried About Inflation:
The chairman of the Federal Reserve, Ben Bernanke spoke to members of the House of Representatives today about the state of the U.S. economy. He reiterated his charge that growth is occurring but at a sluggish pace and defended the massive $600 billion bond buyback. Bernanke also stated he wasn’t worried about inflation although some evidence suggests food prices may be rising domestically and abroad.
Increased Inflation Headline Risk?
Chairman Bernanke finds himself in an unusual position trying to defend his policies as the economy grows. The bond buyback has some critics looking for Bernanke to curtail QE2 but unemployment is still at 9 percent and businesses are just now becoming more confident about the prospects for the future. New headlines regarding price increases are adding to inflation woes. For example, corn prices in the U.S. may be affected by 15 year lows in inventory and some U.S. food manufactures have warned they may have to raise prices.