Transcripts

Fed Chairman Bernanke & Caterpillar Blossom Into A Stock Surge

SUSIE GHARIB: Another day, another record for the Dow. The blue chip average rose 23 points on news of a stock buyback by Dow component Caterpillar and more reassuring comments from Ben Bernanke. The Federal Reserve chairman testified on Capitol Hill for a second day, repeating his view that while the economy is in good shape, the biggest risk is higher inflation. Speaking before the House Financial Services Committee, Bernanke said the Fed is prepared to respond if inflation picks up.

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: We've seen some very strong consumer spending numbers. We've seen some strong income growth which suggests that the economy may be stronger than we think. It's possible. And in the sense that aggregate spending may exceed our capacity and put pressure in product markets, that would be a concern.

GHARIB: Bernanke again signaled that he is comfortable with current interest rate levels. But he cautioned that in order for the economy to grow in a sustainable way, inflation needs to be quote well controlled.