The new Fed chairman, Ben Bernanke, gave his first testimony before the Finance Committee of the House of Representatives. Here is the Reuters summary of his testimony: Bernanke. The two big messages were that he (like Greenspan before him) believes that inflation is the ultimate evil and that he’s ready to use another rate hike to slay the inflation dragon if necessary. With the economy humming along, it’s all well and good to worry about inflation.
For small and mid-sized business the bigger issue is to sustain the economic expansion. We are now in a “trickle up” economy where small and mid-sized business is the engine of growth. An overly cautious Fed policy that slows growth through higher interest rates is not in our best interests.