WASHINGTON, D.C. --- Federal Reserve Chairman Ben Bernanke this week told a House Financial Services Committee that high energy prices are hurting the economy "in terms of real activity and in terms of inflation."
Bernanke said he plans to moderate economic activity to control inflation. But if oil prices rise another $10 or $15 a barrell, there would be "significant consequences," he told committee members, according to an Associated Press account. Bernanke added that the prices have already spurred oil demand reductions but "perhaps less than we would like."
Following Bernanke's comments, crude oil prices fell Friday. Light, sweet crude for September delivery dropped 19 cents to $74.08 a barrel in Asian electronic trading on the New York Mercantile Exchange by mid-morning in Singapore.
Fighting between Israel and militants in Lebanon led crude futures to reach a record of $78.40 last Friday.
Originally posted on Fleet Financials