Rising energy prices pose risk to US economy: Bernanke

Washington (Platts)--27Apr2006

US Federal Reserve Chairman Ben Bernanke Thursday warned that rising
energy prices posed a risk to both US economic activity and to inflation.

"Energy prices remain a concern: The nominal price of crude oil has risen
recently to new highs, and gasoline prices are also up sharply," Bernanke told
the US Congress' Joint Economic Committee.

"Rising energy prices pose risks to both economic activity and inflation.
If energy prices stabilize this year, even at a high level, their adverse
effects on both growth and inflation should diminish somewhat over time.
However, as the world has little spare oil production capacity, periodic
spikes in oil prices remain a possibility," he said.

Bernanke, who took over from Alan Greenspan earlier this year, said that
inflation appeared to be in control, but that increases in energy prices had
pushed up overall consumer inflation over the past year or two.

"Although pass-through from energy and commodity price increases to core
inflation has thus far been limited, the risk exists that strengthening demand
for final products could allow firms to pass on a greater portion of their
cost increases in the future," he said.

--Cathy Landry, cathy_landry@platts.com

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