Suggested alternate title: In Defiance of Reality (and the Treasury Market) Fed Chief Pumps in All Out Effort to Keep Naive Public Buying Stocks.
Feb. 24 (Bloomberg) -- U.S. stocks rose, halting a two-day drop in the Standard & Poor’s 500 Index, after Federal Reserve Chairman Ben S. Bernanke said the economy still requires low interest rates to spur demand.
Keynes' ghost is happy.
JPMorgan Chase & Co. and Bank of America Corp. paced gainsin banks after Bernanke told Congress in prepared remarks that the “nascent” recovery will warrant “exceptionally low levels of the federal funds rate for an extended period.”
“The market is breathing a sigh of relief that he didn’t say anything hawkish,” said John Kattar, chief investment officer at Eastern Investment Advisors in Boston, which manages $1.6 billion. “The Fed is trying to walk a very fine line between satisfying the tremendous political pressures on them and maintaining credibility.”
U.S. stocks retreated yesterday after a gauge of consumer confidence decreased to the lowest level since April 2009, spurring concern the economic rebound will slow.
I have mixed views of this since 'da pub' can be considered a reliable contrary indicator, except of course when they are struggling so badly that there is no denying the pain - except by officials in cushy offices.
The S&P 500 is down 4.8 percent since reaching a 15-month high on Jan. 19 as growing concern about widening budget gaps in Greece, Portugal and Spain helped spur a retreat.
PIGS are a symptom, not a cause.
Bernanke began his semi-annual monetary policy testimony before the House Financial Services Committee as the Fed wrestles with unwinding economic stimulus programs without worsening an unemployment rate that the central bank forecasts at 9.5 percent to 9.7 percent in the fourth quarter.
Inflate or die Benny boy... inflate or die.