Bernanke sends soothing message on inflation

MarketWatch ^ | 12:02 p.m. EDT Aug. 22, 2008 | Greg Robb, MarketWatch

[Ernest_at_the_Beach]

THE FED

Bernanke sends soothing message on inflation

Fed chief says price pressures likely to moderate this year and next

JACKSON HOLE, Wyo. (MarketWatch) -- Federal Reserve Chairman Ben Bernanke sent a soothing message to global markets Friday, saying inflation was on track to moderate in coming months, and triggering a rally in stocks on speculation that means the Fed will keep interest rates low for the near future.

Recent developments in commodity prices and the dollar, combined with slower growth, should lead inflation pressures to ease, Bernanke told policymakers and leading economists attending the Fed's annual retreat in Jackson Hole. The recent decline in commodity prices and the increased stability of the dollar have been welcome trends, Bernanke said.

"If not reversed, these developments, together with a pace of growth that is likely to fall short of potential for a time, should lead inflation to moderate later this year and next year," Bernanke said. Read the speech.

The Fed chairman stressed that the central bank was committed to price stability over the medium term and that the Fed will have to monitor inflation carefully as the outlook remains uncertain.

[Moonman62]

"If not reversed, these developments, together with a pace of growth that is likely to fall short of potential for a time, should lead inflation to moderate later this year and next year," Bernanke said.

Bernanke is better than most, but I wish that one day we could get a Fed chief who knows that growth doesn't cause inflation.

[steve86]

I thought the ridiculous rally was caused by the Korean bank taking over LEH rumor. Have to get the fed talking points straight.

[Ernest_at_the_Beach]

Same reporter:

A mountain of worry for Fed at Jackson Hole,/b>

**********************EXCERPT*********************

The theme of the Fed's Jackson Hole seminar this year, 'Maintaining stability in a changing financial system,' seems more like a prayer to the mountain gods than anything else.

[Ernest_at_the_Beach]

MW has that covered too:

Lehman shares leap on buyout talk

[mysterio]

Thanks, Ben. Now let’s fire up the presses and bail out some more banks!

[CRBDeuce]

rally was caused by the Korean bank taking over LEH rumor. Have to get the fed talking points straight.

Nah...according to CNBC the rally was because Buffet compared the bank situation to a nudist colony....'course he was talking to Becky Quick at the time, so I'm guessing he wasn't really thinking about banks!

[vietvet67]

“According to Jim Rogers, the famous commodities guru, commodity prices move in cycles of about 18 years, and since the current bull market started at 2002, he expects it to last until about 2020.”

[LomanBill]

Recent developments in commodity prices and the dollar, combined with slower growth, should lead inflation pressures to ease...

 

That's what Gilliben says today...

 

 

But...

 

This time last year, Bernanke told the conference the Fed would take steps to shield the economy from the U.S. housing collapse, but would not bail out investors.

http://www.freerepublic.com/focus/f-news/2065826/posts

 

 

So was Gilliben lying then... or is he lying now?  I'd say he's got a bit of a credibility issue.

 

 

Jupiter Island, Jekyll Island,

 

 

Gilligan's Island... 

 

It's tough to tell them apart these days.

 

Does the skipper wear NyLons?

[Notary Sojac]

“[House] price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas.” — Fed Chairman Ben Bernanke, Oct. 20, 2005

“[The housing downturn] looks to be a very orderly and moderate kind of cooling.” — Fed Chairman Ben Bernanke, May 18, 2006

“Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.” — Fed Chairman Ben Bernanke, May 17, 2007