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Bedeviling Ben Strikes Again!

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How much fun it must be to be Fed honcho Ben Bernanke these days! Coming in with a reputation of being somewhat soft on inflation, he then confused the markets by making alternating dovish and hawkish noises in several speeches and his famous dinner table aside to CNBC’s Maria Bartiromo.
For the past couple of weeks, however, both Bernanke and the rest of the Fed members seem to be engaged in a campaign to asset their tough-on-inflation credentials. The markets have mostly bought the act, with most analysts expecting one or two more interest rate hikes.
Then today he gives a speech that seems to warn that the real danger is “inflation expectations” rather than honest-to-goodness, too-many-dollars inflation. What’s more, he seems to buy into the notion that the increase in core inflation is mostly due to spill-over effects from increases in energy prices. The Wall Street Journal went so far as to give the story on the headline “Bernanke Highlights Inflation Risks, But Sounds Somewhat Dovish Note.”
Which is to say, the Benanke dance continues! Fun!

Bernanke Says High Oil Prices May Slow Growth, Spur Inflation