Highlights from Bernanke's press conference:
On when the Fed might begin raising rates: "We're at least two or three meetings away from taking any further action, and I emphasize "at least."
On whether the weakness in the economy was "temporary": Bernanke said he was "willing to acknowledge the possibility that some of the slowdown is due to factors which are longer lived and will be operative still next year."
On the recent spike in inflation: "Given that some of the temporary factors affecting inflation are likely to reseed, I think it's reasonable to think that core inflation will fall back toward mandate consistent levels."
On whether there would be further asset purchases (QE3): Bernanke drew a distinction between the situation now and when he began the asset purchase program in August. "As of last August we were essentially missing significantly on both sides of our mandate, inflation was too low and falling and unemployment looked like it may be beginning to rise. In that case the case for monetary action was clear in my mind."
The situation has now changed, and Bernanke said he felt the asset purchase program was successful: "I think that the securities purchases have been successful in eliminating deflation risk," Bernanke said.
On whether U.S. banks are exposed to Greece: "The banks that we regulate are not significantly exposed to those countries directly at least, they have significant exposures to European banks in the nonperipheral counties so indirectly they have that exposure and that includes credit default swaps and so on...We have asked the banks to do essentially stress tests looking at all their positions and hedges, what would the affect on their capital be if Greece defaulted."
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