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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (17497)	12/3/2004 1:37:51 AM
From: mishedlo	Respond to of 116555

Inflation under control: Fed´s Bernanke - Thursday, December 2, 2004 9:24:22 PM afxpress.com Inflation under control: Fed's Bernanke - UPDATE 2 WASHINGTON (AFX) -- Inflation is under control and is expected to remain tame, said Federal Reserve Board governor Ben Bernanke Thursday "I think inflation is still quite well-contained. And I think inflation expectations are well-contained," Bernanke told reporters after a speech to the National Economics Club "Whatever risks exist are not large ones," he said But as the economy approaches full-employment over the next year or so, and as pricing power returns a bit, "we need to be exceptionally vigilant to make sure that inflation pressures don't re-emerge," he said "But currently inflation looks to be under good control and I expect it will remain so," he said Bernanke said the economy has been "quite resilient" and growth in the fourth quarter "will be similar, perhaps a bit higher" than the 3.9 percent GDP growth rate in the third quarter "I think the economy is doing well," he said "We expect growth to continue into next year," he added Bernanke said the large U.S. current account deficit is "a world problem" and cannot be solved by the U.S. alone He said U.S. consumers must save more, but foreign countries must increase their domestic demand and not rely so much on the U.S. markets to sell their goods In his prepared remarks, Bernanke said the Federal Reserve is not using any set rules to set the direction of monetary policy Instead, the Fed is more and more relying on a "forecast-based approach" to monetary policy, where different rate scenarios are used to predict how the economy is likely to respond over the next two years to different monetary policy plans, he said "The forecast-based approach has become increasingly dominant in the monetary policymaking of leading central banks," Bernanke said that using the forecast-based approach means the public will have a harder time figuring out the likely course of Fed policy because policy plans "depend in a complex way on policymakers' outlooks, risk assessments and objectives." As a result, clear communication "is especially important," Bernanke said The view that providing information to the public about the Fed's intentions would limit the central bank's flexibility is misguided, Bernanke said "Failing to communicate with the public does not create genuine policy flexibility but only reduces the potency and predictability of the effects of given policy," he said