Bernanke to markets: Deflation is here (?)

Ben Bernanke's comments to Congress today seemed to elicit a flight to quality (Treasuries up, stocks down, i.e., position as if we're Japan).

Bernanke:
"... underlying inflation has trended down over the past two years.... expect continued moderate growth, a gradual decline in the unemployment rate, and subdued inflation over the next several years. ... progress in reducing unemployment is now expected to be somewhat slower than we previously projected, and near-term inflation now looks likely to be a little lower ...One factor underlying the Committee's somewhat weaker outlook is that financial conditions—though much improved since the depth of the financial crisis—have become less supportive of economic growth in recent months."