Said Chairman Bernanke at this week's Humphrey?Hawkins testimony?
Monetary policy is providing important support to the recovery while keeping inflation close to the FOMC?s 2% objective... (*)
And while there are perhaps price inflation risks, he said?
? at this point they?re not of sufficient concern that they outweigh the important benefits of trying to support a continued recovery?
Underscoring his belief that the only cost to his easy money policies is the possibility of price inflation down the road, the Chairman goes on to say?
Inflation is currently subdued, and inflation expectations appear well anchored: neither the FOMC nor private forecasters are projecting the development of significant inflation pressures
To us, it's patently clear... The Chairman will continue his zero interest rate policy as well as his current $85 billion per month asset purchase program, perhaps even step that program up, until the state of the economy is to his liking, the only limiting factor being the rate of price inflation in goods and services. In so doing, in the Chairman?s mind, economic prosperity will be assured, for the only risk to his easy money policies is the possibility of price inflation down the road.
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