March 1, 2011
Federal Reserve chairman Ben Bernanke on Tuesday warned a “sustained” rise in oil prices could threaten US growth and spark dangerous price rises, as he eyed turmoil in Libya.
Bernanke told Congress he believed unrest in the oil-rich Middle East would result in “temporary” and “modest” increase in US prices, but acknowledged greater risks remain.
“The most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in US consumer price inflation.”
“That said, sustained rises in the prices of oil and other commodities would represent a threat both to economic growth and to overall price stability.”
He added there was a particular risk from unrest pushing up expectations about future price rises.
This article was posted: Tuesday, March 1, 2011 at 9:37 am