Posted on Monday, 7th December 2009 by admin
In a speech at the Economics Club of Washington, Bernake reiterated his position on ultra low interest rates.
His headline quote is that the economy is facing: “formidable headwinds.” He then went on to restate his position in detail. For the overall economy, he sees a moderate recovery. Credit remains tight, especially for individuals and small businesses.
The labor market is still weak, despite an end to deep job losses. Along with the weak job market, consumers are holding back on spending, afraid of losing their jobs.
He sees inflation as not a major concern. Finally, the Fed’s oversight of the banks will prevent another crisis.
The big question is how the markets will interpret Bernanke’s remarks. Yes, the Fed may keep rates low for some time, however, were November’s numbers the first shot across the bow? Should we be looking six months down the road? Remember, markets trade on future expectations, not so much on present day events.
Would you buy gold and commodities on dips at these levels?
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Tags: Rates, Ultra Low
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