Bernanke banking on commodities and dollar

JACKSON HOLE, Wyo., Aug. 22 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke said Friday "the financial storm" hadn't abated but was rippling through the general economy.

Speaking at the central bank's annual meeting in Jackson Hole, Wyo., Bernanke said, "the financial storm that reached gale forces … has not yet subsided."

Bernanke said the "recent decline in commodity prices, as well as the increased stability of the dollar, has been encouraging."

The bank, he said, "is committed to achieving medium-term price stability" and would "act as necessary" to keep inflation in check.

"The inflation outlook," which is highly dependent on commodity prices, "remains highly uncertain" he said.

But, he gave no immediate signal the bank would raise fund rates to combat inflation. The bank's strategy of keeping the current rate low was predicated on "our expectation that the price of oil and other commodities would ultimately stabilize," he said.

Bernanke didn't mention the Federal Home Loan Mortgage Corp. or the Federal National Mortgage Association, which many believe are headed for a government bailout.