Chairman Bernanke’s testimony strongly suggested that the Fed does not have an itchy finger in terms of doing anything on the funds rate front for the foreseeable future. He reiterated that rates will remain “exceptionally low” and despite Mr. Hoenig’s dissent at the last meeting, Bernanke repeated the words “for an extended period”. He sees inflation as remaining “subdued” for years, not months or quarters, and even with the base-case view of a sustainable recovery, the unemployment rate outlook is “tilted to the upside”. This is key since the Fed, as a rule, does not begin to tinker with rates until the unemployment rate is down one percentage point from the recession peak. That could be well into next year and many Fed watchers I respect do not see a move until some time in 2011.