Bernanke: U.S. will not repeat the situation of stagflation.

<P> Federal Reserve (Fed) Chairman Ben Bernanke said on Thursday that the U.S. will not be repeated in the 1970s stagflation situation, but admitted that inflation might make the Fed's efforts to stimulate the economy more difficult. .</ P> <P> It http://finance. Hearing, in the U.S. housing market downturn and the economy could not cut into the time of recession concerns, but did not ease inflation pressures. .The latest data showed U.S. consumer prices in January (CPI) rising 0.4%, the producer price index (PPI) climbed 1%, so investors criticized the Fed cut interest rates just to lift the economy, but softened against inflation .position. .The Bernanke Fed focus on the latest speech shows are still downside risks facing the economy, but also opened the door to cut interest rates to support economic growth. .</ P> <P> to Reuters, Bernanke told the Senate Banking Committee, said: "I think not stagflation, ... ... I think that much will not repeat itself the scene of the 1970s." Suffered at the same time economic growth in the U.S. economy .double whammy of stagnation and inflation. .</ P> <P> Bernanke said the current economy is facing inflationary pressures from the global oil, metals and food, strong demand, the prices of these products should be stabilized in the coming months. ."If that is the case, inflation should fall, so we can slow growth and the financial markets of the major issues to respond." </ P> <P> since mid September last year, the Fed has adjusted its benchmark interest rate .low 2.25 percentage points to 3% in order to avoid the U.S. economy into recession. .Although the public generally believed that the Fed will cut interest rates further, but the unexpectedly high inflation is worrying the central bank to stimulate the economy may go too far. .Even as Bernanke's speech on the occasion, U.S. crude oil futures hit a new high of $ 102.74, breaking the 1980 record of inflation-adjusted high of $ 102.53. .</ P> <P> the committee Republican, Senator Richard Shelby, said: "Although the slow economic growth in China makes it difficult to accept, but if unable to restrain inflation, the result will be much more painful and more difficult to clean up." < ./ P> <P> Bernanke clearly expressed in the House the intention of further interest rate cuts, and Members asked him to clarify the Fed's forecasts of declining inflation. .In response to questions Bernanke on Thursday acknowledged that inflationary pressures may make it more difficult for the Fed to ensure economic growth, which in 2001 in contrast to the situation against the recession, when inflation is low. .</ P> <P> economists said the deepening downturn in the property market and related credit crunch have been the edge of the economy into recession, if not already in recession, then. .</ P> <P> Bernanke said some small U.S. banks may have in the property market downturn and the plight of mortgage losses. .This comment push stock prices lower. ."I expect there will be a number of bankruptcy cases," he said. .Bernanke said, policy makers and the mortgage industry, it is important to go beyond temporary solution subprime problems and seek long-term solutions. .</ P> <P> He urged senators to continue to advance on the Federal Housing Administration and government-supported housing enterprise reform, saying further action may be necessary. .But he also said: "I do not have more suggestions." This implies he asked Congress to help struggling homeowners government proposal lukewarm response. .</ P> <P> Bernanke said the Fed is closely watching the weak dollar, U.S. dollar against the euro Thursday, a record low. .But he also said he believed foreign investors still have confidence in the United States. .He believes that the Federal Reserve to ensure solid growth in economic recovery actions will help ensure the continued flow of foreign investment. .He added that the Fed did not significantly reduce their dollar holdings by foreign governments. .</ P>.