Reply #48: Bernanke stresses Fed will take action if inflation flares

[Ghost Dog]

http://www.marketwatch.com/news/story/bernanke-stresses-fed-take-action/story.aspx?guid=%7BAC77E0ED%2D5C4A%2D46CA%2DA63F%2D46F54C91672A%7D

WASHINGTON (MarketWatch) - Fed chief Ben Bernanke said Wednesday that the central bank is comfortable with rates at their current levels but stressed that further rate hikes could occur if the inflation outlook worsens. "So far, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing of core inflation," Bernanke said in his prepared testimony about monetary policy for the Senate Banking Committee. But the risk that inflation will not gradually moderate is the "predominant policy concern," he said. The FOMC "is prepared to take action to address inflation risks if developments warrant," Bernanke said. The Fed chairman's testimony was broadly in line with the FOMC's most recent policy statement on Jan. 31 and with the expectations of Fed watchers that Bernanke would warn about higher rates but be in no rush to tighten monetary policy.