Speaking at a Harvard commencement address, Bernanke said overall inflation is significantly higher than he would like, but less than the 1970s-style stagflation.

The overall inflation rate has averaged about 3.5% over the past four quarters, significantly higher than we would like but much less than the double-digit rates that inflation reached in the mid-1970s and then again in 1980," Bernanke said in his prepared remarks.

Bernanke said he didn't expect to see the long lines for gas seen in the 1970s, but he acknowledged the burden high gas prices have had for many households.

"We are experiencing a serious oil price shock, sharply rising prices for food and other commodities, and subpar economic growth," he said.

Bernanke added that high energy prices do provide an incentive for action and that price stability is a prime concern of the Fed. Rising inflation expectations do provide a cause for concern, he added.

"Until the recent slowdown - which is more the result of conditions in the residential housing market and in financial markets than of higher oil prices - economic growth was solid and unemployment remained low, unlike what we saw following oil price increases in the '70s," said Bernanke.

By Steve Stecyk and edited by Stephen Huebl