Yellen: Fed should toe the line
Borrowing a line from Bernanke, the Fed's no. 2, Janet Yellen, also recognizes rising commodity prices as a "transitory" phenomenon.
As long as wages stay flat, she has said, inflation won't become a problem.
"While the recent run-up in commodity prices is likely to weigh somewhat on consumer and business spending in coming months, I do not anticipate that those developments will greatly impede the economic recovery as long as these trends do not continue much further."
Yellen concedes that rising oil prices put the Fed in a Catch-22. While more easing could help encourage job creation by boosting the economy, it would also boost inflation, she said. On the other hand, if the Fed tightened its policies, it risks weakening the economic recovery.
For those reasons, Yellen recently said she thinks leaving monetary policy unchanged may be the most "appropriate balance."
NEXT: Plosser: Reverse course soon
Last updated April 26 2011: 2:45 PM ET
Lights, camera, Bernanke!
