Washington, 6 November 2010

Federal Reserve board chairman Ben Bernanke downplayed the risk to the economy from the recent spike in commodity prices on Friday. In a question-and-answer session with college students at an event sponsored by Jacksonville University, Bernanke said with so much slack, or excess supply, in the economy, it is "very difficult" for producers to pass those higher costs to consumers.

Bernanke said the price hikes in globally traded commodities stemmed from strong demand from emerging markets. While households will have to pay a higher price for gasoline, lower labor costs will help keep overall inflation low, he said. Asked about foreign concern with the Fed's new $600 billion bond buying program, Bernanke said the global economy would benefit from a pick-up in the U.S. economy.

Ends --