na, wenn Bernanke die inflation als zu hoch bezeichnet, haben wir gaaanz sicher zinssenkungsphantasie, oder? grins, was für ein schönes zusammentreffen einer sich rapide abschwächenden konjunktur, inflationsangst und alltime-highs
DJ Bernanke: Core Inflation Still `Uncomfortably High`
WASHINGTON (Dow Jones)--Federal Reserve Chairman Ben Bernanke on Tuesday said core inflation is still "uncomfortably high" and warned it would be "especially troublesome" if inflation doesn't moderate as he and other officials expect.
"In the case of inflation, the risks to the forecast seem primarily to the upside," Bernanke said in prepared remarks to the National Italian American Foundation.
"Given the current level of inflation, a failure of inflation to moderate as expected would be especially troublesome," he added.
Though Bernanke's forecast remains for a moderation in economic activity and inflation in coming months, his comments suggest the Fed isn't as prepared to lower rates as financial markets expect.
The Federal Open Market Committee has kept the federal funds rate unchanged at 5.25% its past three meetings, and is widely expected to hold them steady again when it meets next month. Financial markets are currently pricing in a rate reduction as early as the first quarter of 2007.
But Bernanke reiterated the Fed's bias toward higher rates should inflation persist, saying Tuesday that "whether further policy action against inflation will be required depends on the incoming data and in particular on how these data affect the FOMC's medium-term forecasts of both inflation and output growth."
In a nod to recent soft readings on consumer prices, Bernanke said inflation "has been somewhat better behaved of late."
Tuesday's remarks were Bernanke's most comprehensive on the economy since his semiannual Congressional monetary policy testimony in July.
The Fed chairman said Tuesday that the moderation in growth seems to be occurring "roughly along the lines envisioned" in the July report.
After growing at a robust 5.6% pace in the first quarter, gross domestic product decelerated to rates of 2.6% in the second quarter and 1.6% in the third. Bernanke said the fourth quarter "is likely to be in the same general range that it was in the second and third quarters."
Housing has been a key factor slowing the overall economy, Bernanke observed, though he said some indicators suggest the rate of home buying "may be stabilizing."
Still, the rate of new building could remain under pressure, he said, since official housing data "likely understate the full extent of the inventory buildup."
"The slowing pace of residential construction is likely to be a drag on economic growth into next year," Bernanke said.
Yet outside of housing and automobiles, "economic activity has, on balance, been expanding at a solid pace," Bernanke said.
He expects the economy to grow "modestly below trend" in the near term before picking up "to a rate that is roughly in line with the growth rate of the economy's underlying productive capacity."
Bernanke added that after cutting production significantly in recent months, the automobile sector "may already be showing signs of strengthening."
Bernanke said he remains "optimistic" about the long term prospects for U.S. productivity and downplayed recent sluggish data, saying they likely reflect typical data volatility and not a "sea change."
Still, the economy's long-run growth potential should slow in coming years as Baby Boomers retire, thus trimming growth in the labor force, Bernanke said.