Bubble ben bernanke speaking tomorrow

Discussion in 'Economics' started by S2007S, Oct 15, 2010.

  1. S2007S


    Bubble ben bernanke is speaking tomorrow again, wonder how much nonsense he is going to speak tomorrow about QE2, I am sure he wont say anything to disturb this precious rally, I mean everything is going perfect for him, everyone is cheering him on as he just continues to take more tricks and great illusions out of his big magic top hat.

    Fed Chairman Ben Bernanke's speech in Boston on Friday is by far his most anticipated commentary since, well, August.


    That was when the he spoke at the Kansas City Fed's annual symposium in Jackson Hole, Wyo. and tipped his hand on the idea of quantitative easing, which the markets have embraced.

    "I think the markets are really geared up for him...no question," said Deutsche Bank chief U.S. economist Joseph LaVorgna. "They're hoping Bernanke is going to be more specific with his perceived intentions and I don't think he's going to say more than he said in August. I don't think he's going to come up with some more creative instrument then he had in August."

    The markets widely expect the Fed to announce after its Nov. 3 meeting that it will restart a program of quantitative easing through the purchase of Treasury securities. The idea is to pump money into the system, which in theory would push down lending rates and reflate asset prices. Just the whiff of easing has sapped the dollar, which is down nearly 8 percent against the euro in the last three months.

    "I think the Federal Reserve is going to have to surprise the market," said Marc Chandler, senior currency strategist at Brown Brothers Harriman.

    "In order to get ahead of the curve and avoid the 'buy the bonds on the rumor of QE and sell them on the fact'...to avoid that, the Federal Reserve has to get ahead of market expectations and that's tricky because they're fueling market expectations," said Chandler. He suggested the Fed could take some other moves, like reduce interest it pays banks on reserves, or target specific levels of inflation or use an interest rate target.

    Bernanke speaks at 8:15 a.m. at a Boston Fed conference. His topic is monetary policy in a low-inflation environment. The Fed has indicated it is concerned about inflation being too low, and traders are now watching inflation data even more closely.