Bernanke lays out some more of his thinking on the core vs headline inflation question. He says that the Fed is concerned about overall inflation, noting that its dual mandate deals with price stability, not price stability excluding energy and food. The key issue, he said, is what best signals "the underlying trend of inflation" over the next year or two. In so far as food and energy prices impact inflation expectations, they matter. However, given the historical volatility in food and energy prices, "the core portion is sometimes a better indicator" of where the inflation trend is heading. (LPN)
1622 GMT [Dow Jones] Swap spreads wider amid subprime worries with the 2-yr swap spread half a basis point wider from the morning`s levels at 51.00 bps. The 10-yr swap spread though is unchanged at 67.25 bps. The 2-yr swap rate is at 5.328% and the 10-yr swap rate is at 5.464%.
1622 GMT [Dow Jones] Swap spreads wider amid subprime worries with the 2-yr swap spread half a basis point wider from the morning`s levels at 51.00 bps. The 10-yr swap spread though is unchanged at 67.25 bps. The 2-yr swap rate is at 5.328% and the 10-yr swap rate is at 5.464%.