The overall credit conditions have for example been severely affected by housing market and other economic trends. This has been exacerbated by energy and commodity price increases, which have affected household buying power negatively. Concomitantly, the inflation rate has remained high at nearly 3.5% for the first five months of 2008. Chairman Bernanke also noted that the trend in rising prices was likely to further increase inflation. Furthermore, oil production has risen only slightly, despite sharp price increases. This indicates tighter government control over oil reserves.

The declining value of the dollar in foreign markets also seems to be a matter of concern for congress that both result from and in turn affect the volatility of oil prices. There does not seem to be a particular emphasis on any single aspect of inflation or the recession. Instead, the general consensus appears to be that all the elements within the economic system have some influence on both the recession and...

The Federal Open Market Committee have for example eased policy to mitigate downside risks to economic activity. Secondly, the Federal Reserve expanded some special liquidity programs to support financial markets and attempt to reestablish financial stability. Despite the positive effects of these actions, Chairman Bernanke however emphasized that additional actions may be necessary to address the effects of the declining housing market and rising energy prices.
Bibliography

Bernanke, Ben S. Testimony: Semiannual Monetary Policy Report to the Congress. Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate. July 15, 2008. http://www.federalreserve.gov/newsevents/testimony/bernanke20080715a.htm