Bernanke Says

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Bernanke Says Terror, Protectionism Risk Global Trade

The world is benefiting from an ``unprecedented'' pace of global economic integration that may be constrained by protectionism and terrorism, said Federal Reserve Chairman Ben S. Bernanke.

Bernanke said``International tensions and the risks of terrorism, already constrain the pace of worldwide economic integration and may do so even more.”  in his prepared remarks to the Kansas City Fed's conference in Jackson Hole, Wyoming.
Bernanke, didn't address U.S. monetary policy or economic conditions and hasn't discussed those topics since his July monetary policy testimony to Congress.

The Fed chairman said closer economic ties since World War II are being spurred by technology and communication which has broadened the range of products that are tradable, and allowed companies to spread their supply chain across the globe.

Since he last spoke on the economy, reports have shown weaker U.S. home sales and consumer confidence. At the same time, inflation has remained elevated and above the numeric benchmarks of some policy makers, while manufacturing is expanding. The Fed ended a two-year run of interest-rate increases on Aug. 8, holding the benchmark lending rate at 5.25 percent.

Investors said they weren't surprised that Bernanke stayed away from monetary policy given the uneven economic outlook. [color=red/code]

Gross domestic product slowed to an annual rate of 2.5 percent last quarter, down from 5.6 percent in prior three months. Fed officials anticipate growth in the second half will stay around the second-quarter rate, according to their estimates presented to Congress in July.

Inflation quickened to 2.4 percent in the 12 months that ended in June, according to the personal consumption expenditures price index, minus food and energy.