Analysts expect higher oil prices won't affect Bernanke's testimony
Federal Reserve Chairman Ben Bernanke speaks during a House Financial Services Committee hearing on Capitol Hill in Washington, D.C.
TEXT OF STORY
STEVE CHIOTAKIS: Federal Reserve Chairman Ben Bernanke is giving another report to Congress. Chaos in the Middle East and North Africa has caused oil prices to spike. And Congress is asking Bernanke whether the rise in gas prices will stifle America's economic recovery.
Karen Shaw Petrou is Managing Partner of Federal Financial Analytics. She's with us live from Washington, D.C. Good morning.
KAREN SHAW PETROU: Good morning Steve.
CHIOTAKIS: So Bernanke said today the spike in oil prices won't have much of an effect on the economic recovery. What do you think?
SHAW PETROU: I think he said, so far so good, but if this lasts any longer, watch out. And I agree with that. I mean these times are very very unsettled, so he's being very careful about the forecast right now and that makes sense.
CHIOTAKIS: The Fed chairman also said, Karen, the recovery was becoming "self-sustaining." But then the central bank continues to buy up government bonds to keep interest rates low. Are they sending out mixed signals here?
SHAW PETROU: I think they're just, again, being very very careful. Becoming self sustaining is good, on a firm recovery moving forward, not yet. And that's where they're remaining really cautious. And again I think that's right.
CHIOTAKIS: How important are the words that he's using and choosing today?
SHAW PETROU: They're always very carefully chosen. To send carefully nuanced messages to the market that make us a confidence but not over happy.
CHIOTAKIS: Cautiously optimistic.
SHAW PETROU: Exactly.
CHIOTAKIS: All right. Karen Shaw Petrou, Managing Partner of Federal Financial Analytics in Washington D.C. Karen thanks.
SHAW PETROU: Thank you.