Ben Bernanke, the chairman of the Federal Reserve, gave a testimony of two halves on his semi-annual visit to Congress. In the monetary policy half he repeated the Fed’s stance of the last year or so: more concerned about inflation than growth. In the other half he unveiled some sensible plans to prevent a repeat of the debacle in the subprime mortgage market.

On monetary policy Mr Bernanke said once again that the Fed’s biggest worry was a pick-up in inflation in 2008 and 2009. That stance looks right: the labour market is tight, growth is not far below trend, and the dollar’s 9 per cent fall against the euro over the last year is equivalent to a monetary loosening.