Ben Bernanke: Tough Guy

Bernanke, who took over as Fed chief in February, needed to send such a signal to counter the markets8217; doubts about his anti-inflation resolve, analysts said 8212; even though it meant jolting the markets with the implication of higher interest rates. He called recent inflation trends 8216;8216;unwelcome,8217;8217; noting that the Labour Department8217;s consumer price index, excluding volatile food and energy items, had risen at a 3.2 per cent annual rate over the three months ended in April and at a 2.8 per cent pace in the six months ended in April.

When Bernanke told Congress in April that the Fed might pause in its rate increases, 8216;8216;he sent a bad message that the central bank was going to be soft on inflation, and that was the wrong message to send when energy, commodities and raw materials prices were at multi-decade or historic highs,8217;8217; said Richard Yamarone, director of research at Argus Research Corp.

Bernanke has long argued that Fed officials should be more open about their thinking to help the markets anticipate the likely course of interest rates. 8212;Nell Henderson