Fed chief comments boost dollar
US Federal Reserve Chairman Ben Bernanke told a press conference at the Fed’s Washington headquarters yesterday that monetary policy will need to be tightened when the economy recovers in order “to prevent the emergence of an inflation problem down the road.”
Following the press conference, many analysts said the Fed chairman is suggesting that the US is gradually but steadily exiting from its supportive policies – despite recent reports of mixed economic data.
Mr Bernanke’s comments eased concerns about the inflationary impact of US interest rates remaining at the current level of between 0% and 0.25%.
He said interest rates will probably stay at the current low levels for an “extended period.”
Following Mr Bernanke’s comments, the dollar rose 0.8% against the yen, and also gained against the euro and the pound.
The dollar has been under pressure as the world’s largest economy has lagged some other economies in recovering from a crisis that has led to serious consequences across the globe.
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