by Calculated Risk on 4/04/2011 10:22:00 PM

From Dow Jones: Fed's Bernanke Downplays Inflation Fears

Federal Reserve Chairman Ben Bernanke Monday downplayed inflation fears ... Bernanke said the rise in global commodity prices is likely to be temporary and shouldn't translate into a broader inflation problem. ...

"I think the increase in inflation will be transitory," Bernanke said ... He attributed the strong gain in global energy and food prices to supply and demand conditions, adding he reckons these prices "will eventually stabilize."

The Fed chief's remarks, which came in response to audience questions...

Bernanke pointed to continued weakness in the economy, saying the housing sector is one reason why the recovery is not stronger. He said the Fed expects the high rate of foreclosures to continue, and noted this will hurt consumer wealth and confidence.

Here is the full quote on inflation from CNBC:

"I think the increase in inflation will be transitory. Our expectation at this point is that in the medium term inflation, if anything, will be a bit low. We will monitor inflation and inflation expectations very closely." [Bernanke said]

CR: I also think inflation will be transitory. With the sluggish recovery - and the view that inflation will be transitory - it is very unlikely that the Fed will end QE2 early (as some have suggested) and it is also unlikely the Fed will raise rates this year.