Federal Reserve Chairman Ben Bernanke has indicated that the weakness of the U.S. dollar on international currency exchange markets might contribute to rising inflation expectations.
In a speech given via satellite to the International Monetary Committee meeting in Barcelona, Spain, Mr. Bernanke noted that the Fed was “carefully monitoring” the falling dollar’s potential effect on the recent “rise in import prices and consumer price inflation.”
Mr. Bernanke also indicated that he is unlikely to change interest rates in the near future, saying that monetary “policy seems well positioned to promote moderate growth and price stability over time.”
However, he also indicated the Fed would be prepared to respond to future changes in economic conditions, mentioning that the Fed “will, of course, be watching the evolving situation closely and are prepared to act as needed.”
The next Federal Open Market Committee meeting — at which the Fed will set interest rates — is scheduled for June 24 and 25.
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