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Fed expects little effect from oil prices

WASHINGTON » Federal Reserve Chairman Ben Bernanke boldly predicted to Congress yesterday that rising oil prices will cause only a brief and modest rise in consumer inflation.

Appearing before the Senate Banking Committee, Bernanke faced sharp questions about whether rising gasoline prices could spread dangerous inflation through the economy. He said he did not think so.

"The most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation," Bernanke said.

Gas prices jumped over the weekend to a new nationwide average of $3.37 a gallon.

That’s 26.7 cents a gallon more than a month ago.


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