The Shocking Fed: Oil Price Increases Are Due to Demand, Not U.S. Dollar

Ben Bernanke today said that oil price increases are entirely due to increased demand by emerging markets ("according to the IEA", says Bernanke) (video). Unbelievable. Didn't the low U.S. dollar have anything to do with it?

Shocking, and quite appropriate for the title of this blog..

He also said the inflation in merging markets is "their problem". Please see our post today on Brazil's new interest rates hikes.

In addition, according to the Fed:

• Businesses are passing on surging costs to consumers.
• Hiring is modest.
• Wages are barely rising.
• Housing market is still struggling.

But the "economy is expanding at a modest to moderate pace", the Federal Reserve said.

CNN reports: "Retailers and manufacturers across all 12 of the Federal Reserve's districts said they're seeing higher input costs.

But while they told the Fed they're already passing on some of those costs to customers, homebuilders -- especially in the Cleveland and Atlanta districts -- are not, most likely due to the troubled housing market.

Both commercial and residential construction continues to be one of the slower segments of the economy, while manufacturers, retailers and financial firms reported slight growth.

Meanwhile, it's still tough to get credit, and in some regions, banks are actually tightening their standards.

 The Fed reported little evidence of wages increasing in most of its districts"