We can’t wait until unemployment is where we’d like it to be” or inflation gets “out of control” to tighten credit

The above is a quote from Federal Reserve Chair Ben Bernanke.

Gets worse, Bernanke believes the economy will not dip into another recession, yet of course, unemployment will remain at high levels.

While the Fed will raise interest rates from a record low before the economy returns to “full employment,” Bernanke said officials don’t know when that process will start. The banking system isn’t fully healthy and lenders are “cautious” in providing credit, he said.

“The unemployment rate is still going to be high for a while, and that means that a lot of people are going to be under financial stress,” Bernanke said at the event, part of a dinner hosted by the Woodrow Wilson International Center for Scholars.

Bernanke’s stance is consistent with that of several Fed colleagues. Atlanta Fed President Dennis Lockhart said June 3 that the central bank may need to raise rates even with “unacceptable levels of unemployment,” while Eric Rosengren of the Boston Fed said last month it wouldn’t be “appropriate” to have rates close to zero with the economy at full employment.

Kansas City Fed President Thomas Hoenig, the longest-serving Fed policy maker, is calling for an increase in the federal funds rate target to 1 percent even sooner, within a few months. Traders don’t expect the Fed to start raising rates until the first quarter of 2011, based on futures on the Chicago Board of Trade.

Another influence to raise rates was the markets or investors.

Meanwhile the IMF is demanding nations reduce their debt and U.S. Treasury Secretary Geithner wants the G20 citizens to go shoppin'.

Anything but promoting policies and reforms that will foster job creation.