FOMC Supports Easy Money Into ’12; Bernanke Backs Tight Oversight of Clearinghouses

With consumer prices on the rise thanks to higher energy prices and increasing food prices, concerns over inflation, according to the minutes, bear close watching lest increases continue and an inflationary psychology take hold. In the end, however, the committee decided on an eventual exit from current monetary conditions, with tightening to take place in the event of several circumstances. It was expected that bond-buying could cease on June 30 as planned, without disruption of the markets.

While Bernanke did not address the state of the economy in his speech, he did say that, simply because clearinghouses functioned well on the whole during the financial crisis, "We should not take for granted that we will be as lucky in the future." He said that the Fed was working with both the Commodity Futures Trading Commission and the SEC to implement Dodd-Frank provisions that are designed to better coordinate supervision of clearinghouses, to avoid just such an eventuality.