WASHINGTON, July 20: Federal Reserve chairman Ben Bernanke warned on Thursday of “significant consequences” for the US economy if oil prices surge an extra $10 to $15.

In twice-yearly testimony to Congress, Bernanke noted that futures contracts suggest that oil prices will rise moderately in coming months before stabilising.

“If that were to happen, then that source of upward pressure on the inflation rate and also on the adverse effect on growth would be removed over time,” the Fed chief said.

“Obviously any significant $10 or $15 increase from where we are now would have significant consequences,” he told the House of Representatives financial services committee.

Speaking on Wednesday to the Senate banking committee, Bernanke said US inflation and economic growth were likely to slow but that the Fed would stay vigilant against energy-fuelled price pressures.—AFP