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JACKSON, Wyo. — Federal Reserve Chairman Ben Bernanke said Friday that the financial crisis that has pounded the country — coupled with higher inflation — is taking a toll on the economy and poses a major challenge to Fed policymakers.
“Although we have seen improved functioning in some markets, the financial storm that reached gale force” around this time last year “has not yet subsided, and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment,” Bernanke said in a speech at an economics conference.
Bernanke said he thinks inflation will moderate this year and next, and also warned the inflation outlook remains uncertain.
