Since sustained hikes in oil prices could “cause inflation expectations to become less well-anchored,” the Federal Reserve Board will monitor developments and “respond as necessary,” Fed chairman Ben Bernanke told the Senate Banking, Housing, and Urban Affairs Committee Tuesday.

While companies have been slow to pass through price increases during the recession and recovery, “currently, the cost pressures from higher commodity prices are also being offset by the stability in unit-labor costs,” Bernanke said, according to a prepared text of his testimony released by the Fed.

“Thus, the most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer-price inflation.”

However, “sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability, particularly if they were to cause inflation expectations to become less well-anchored,” Bernanke added. “We will continue to monitor these developments closely and are prepared to respond as necessary to best support the ongoing recovery in a context of price stability.”

Meanwhile, “significant increases” in “highly visible” commodities prices, such as gasoline, have plagued the economy since summer, the Fed chief noted.

He said the latest trouble is unrest in the Middle East and North Africa and the “possible effects on global oil supplies have led oil and gasoline prices to rise further.”

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