Fed Chairman Sees Economic Growth on the Horizon, Warns Inflation is a Concern

Chatham, Mass.–Federal Reserve chairman Ben Bernanke said Monday that–although inflation concern is increasing–the risk of a large economic downturn in the U.S. has decreased in the past month.Speaking at a Fed conference in Chatham, Mass., Bernanke said that the increased growth expectations were due to “the effects of the monetary and fiscal stimulus, a gradual ebbing of the drag from residential construction, further progress in the repair of financial and credit markets and still-solid demand from abroad,” the Financial Times said.However, Bernanke said that economic activity during the current quarter “is likely to be weak.””The ongoing contraction in the housing market and continuing increases in energy prices suggest that growth risks remain to the downside,” he said.He also expressed concern about inflation.”The latest round of increases in energy prices has added to the upside risks to inflation and inflation expectations,” he said.Economists may take that to mean the Fed will raise its central interest rate later this year, the Times said.The Fed meets in two weeks.