It anticipates an extended period of businesses and households paying off debts, or deleveraging, combined with only modest growth in deposits "as a result of the pressure on consumers' disposable incomes from ongoing high inflation and cuts in welfare benefits".
Zachary Oxman, portfolio manager for TrendMax, said commodities could be boosted in the months ahead on ideas that ongoing quantitative easing will lead to inflation.
On inflation, the Fed chairman said that while high energy prices continue to be a source of risk, ongoing productivity gains in the labor market should keep wage increases--still the biggest driver of overall inflation--under control.