High energy prices in the wake of Hurricanes Rita and Katrina pose a risk to US economic growth, but inflation expectations remain well-contained, a top White House economic adviser said on Sunday.
"The high energy prices are certainly burdening consumer budgets, they are burdening cost structures of firms and certainly continued increases in energy prices are a risk for economic growth going forward," White House economic adviser Ben Bernanke told the Institute of International Finance annual membership meeting.
"The early indications are that the impact on refineries and pipelines (of Hurricane Rita) has been less than we feared. It remains to be seen if there was significant damage to the offshore drilling platforms and so on," he said.
"I remain optimistic that the impact on energy from these two events will be limited."
Bernanke said that so far, the effects of the hurricanes on US economic growth had been modest, and noted that underlying inflation appeared well-contained so far despite the rise in energy prices. That, he said, gave the US Federal Reserve more flexibility than in past energy crises.
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