WASHINGTON, Feb 28 (Reuters) - The U.S. central bank has some concerns about the domestic subprime mortgage market and is monitoring it closely, Federal Reserve Board Chairman Ben Bernanke told the U.S. House Budget Committee on Wednesday.
“Our assessment is that there’s not much indication that subprime mortgage issues have spread into other mortgage markets,” Bernanke said.
When asked by one lawmaker whether a liquidity crunch was what roiled Tuesday’s global equity market, Bernanke replied: “No, I don’t think so.”
He also said there appears to be a weaker link between inflation risks and unemployment than in the past and that policy-makers need to gauge a wide variety of factors including commodity prices in assessing inflation.
Bernanke also said it is possible an explicit inflation target could become part of the Fed’s communications strategy.