Stagflation not a problem – Bernanke

Federal Reserve Chairman Ben Bernanke says the 1970s conundrum is far off, but rising inflation makes economic stimulus difficult.

WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke told Congress Thursday that the nation is “not anywhere near” the dangerous stagflation situation that prevailed in the 1970s.

With the economy slowing and inflation rising, fears have grown that the country could be headed for the dreaded twin evils of stagnant growth and rising prices known as “stagflation.”


“I don’t anticipate stagflation,” Bernanke told the Senate Banking Committee.

Still, high energy prices and rising inflation do complicate the Fed’s job of trying to keep the economy growing and inflation contained, Bernanke acknowledged.

High energy prices are creating “inflationary stress,” Bernanke said. And, that is “complicating” the Fed’s work in terms of shoring up the economy, the Fed chief said.

AP