Bernanke: Financial crisis taking toll on economyJACKSON, Wyo. (AP) -- Federal Reserve Chairman Ben Bernanke said Friday the financial crisis that has pounded the country -- coupled with higher inflation -- is taking a toll on the economy and poses a major challenge to Fed policymakers as they try to restore stability.
While Bernanke welcomed the recent drops in oil and other commodities' prices, and believes inflation will moderate this year and next, the Fed chief also warned the inflation outlook remains highly uncertain. The Fed, he said, would monitor the situation closely and will "act as necessary" to make sure that inflation doesn't get out of hand.
Given dueling economic cross-currents-- weak economic growth and higher inflation -- many economists believe the Fed will leave rates where they are at its next meeting on Sept. 16, and probably through the rest of this year.
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