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| Version 3 | Version 4 |
|---|---|
| Fed hints at no more US rate cuts | Fed hints at no more US rate cuts |
| (about 13 hours later) | |
| The head of the US Federal Reserve, Ben Bernanke, has signalled that concerns about inflation and a recovery of the economy make more rate cuts unlikely. | The head of the US Federal Reserve, Ben Bernanke, has signalled that concerns about inflation and a recovery of the economy make more rate cuts unlikely. |
| A series of significant rate cuts and the government's stimulus package should mean "somewhat better economic conditions", Mr Bernanke said. | A series of significant rate cuts and the government's stimulus package should mean "somewhat better economic conditions", Mr Bernanke said. |
| His comments sent light, sweet crude $3 lower while the dollar rose to close to a three-month high. | |
| Analysts suggest low US interest rates have contributed to rising oil prices. | Analysts suggest low US interest rates have contributed to rising oil prices. |
| 'Inflation expectations' | 'Inflation expectations' |
| Mr Bernanke also said that the Fed would be monitoring the weakening dollar, which could have an inflationary effect. | Mr Bernanke also said that the Fed would be monitoring the weakening dollar, which could have an inflationary effect. |
| The weakening of the US currency against other currencies can increase demand from foreign investors for goods such as oil, as they are priced in dollars. | The weakening of the US currency against other currencies can increase demand from foreign investors for goods such as oil, as they are priced in dollars. |
| "We are attentive to the implications of the changes in the value of the dollar for inflation and inflation expectations," said Mr Bernanke, speaking via satellite to a monetary conference in Barcelona. | "We are attentive to the implications of the changes in the value of the dollar for inflation and inflation expectations," said Mr Bernanke, speaking via satellite to a monetary conference in Barcelona. |
| Analysts suggest these comments could signal a shift in Fed policy, as it is unusual for the central bank to speak on currency matters. | Analysts suggest these comments could signal a shift in Fed policy, as it is unusual for the central bank to speak on currency matters. |
| "By emphasising the dollar, a role previously assigned to the Treasury secretary, [Mr Bernanke] seems to have injected a new policy constraint that may increase in importance as a determinant of future interest rate changes," said Bill Gross, chief investment officer at Pacific Investment Management. | "By emphasising the dollar, a role previously assigned to the Treasury secretary, [Mr Bernanke] seems to have injected a new policy constraint that may increase in importance as a determinant of future interest rate changes," said Bill Gross, chief investment officer at Pacific Investment Management. |
| US light, sweet crude slipped to $124.76, its lowest level for two weeks. |