Bernanke: Battered economy will revive

The “encouraging” decline in commodities prices and a stronger dollar, coupled with slowing economic growth, should moderate inflation over the course of this year and next, Federal Reserve Chairman Benjamin S. Bernanke said today. However, the inflation outlook remains "highly uncertain" due to the difficulty of predicting commodities prices, he said in prepared remarks delivered at the Federal Reserve Bank of Kansas City (Mo.)'s annual economic symposium in Jackson Hole, Wyo. "Although we have seen improved functioning in some markets, the financial storm that reached gale force some weeks before our last meeting here in Jackson Hole has not yet subsided,” Mr. Bernanke said. “Its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment. Add to this mix a jump in inflation, in part the product of a global commodity boom, and the result has been one of the most challenging economic and policy environments in memory.”