Bernanke talking a bit tough
Anyway, here are a few potentially import comments (with my emphasis added in bold):
"Unfortunately, the prices of a number of commodities, most notably oil, have continued upward recently, even as expectations of future policy rates and the foreign exchange value of the dollar have remained generally stable in the past few months. The possibility that commodity prices will continue to rise is an important risk to the inflation forecast. Another significant upside risk to inflation is that high headline inflation, if sustained, might lead the public to expect higher long-term inflation rates, an expectation that could ultimately become self-confirming."
And on the dollar:
"In collaboration with our colleagues at the Treasury, we continue to carefully monitor developments in foreign exchange markets. The challenges that our economy has faced over the past year or so have generated some downward pressures on the foreign exchange value of the dollar, which have contributed to the unwelcome rise in import prices and consumer price inflation. We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of an erosion in longer-term inflation expectations."
By the way, notice the qualifier "for now" in this excerpt below. This tells me that the Fed is not going to hike immediately, but that it is giving itself the wiggle room to start hiking at any time. My read anyway ...
"For now, policy seems well positioned to promote moderate growth and price stability over time. We will, of course, be watching the evolving situation closely and are prepared to act as needed to meet our dual mandate."
After earlier being up, long bond futures are now trading down about 9/32 to the day's lows. Crude oil is down $1.30 and gold is off by about $12. The dollar index is on its daily high.