2:41 PM
Fed Chairman Ben Bernanke testified recently on Capital Hill. Items about the future were plenty, but lack of direction was there too.
He touched on six items:
1. The Fed is unlikely to begin “tapering” its policy of quantitative easing before December.
2. The big decisions will fall to Bernanke’s successor.
3. We still don’t know whether the U.S. economy is approaching “escape velocity”—the point at which it no longer needs extensive support from the Fed.
4. The federal-funds rate, and the short-term interest rates that are tied to it, won’t be going up anytime soon.
5. For now, the Fed remains Wall Street’s friend.
6. The Fed’s central policy dilemma remains unresolved.
The challenge: how to withdraw monetary stimulus without spooking the markets and undermining the recovery.
He touched on six items:
1. The Fed is unlikely to begin “tapering” its policy of quantitative easing before December.
2. The big decisions will fall to Bernanke’s successor.
3. We still don’t know whether the U.S. economy is approaching “escape velocity”—the point at which it no longer needs extensive support from the Fed.
4. The federal-funds rate, and the short-term interest rates that are tied to it, won’t be going up anytime soon.
5. For now, the Fed remains Wall Street’s friend.
6. The Fed’s central policy dilemma remains unresolved.
The challenge: how to withdraw monetary stimulus without spooking the markets and undermining the recovery.