Market’s UP! Must have liked what Bernanke said…
Stocks rose, after the Standard & Poor’s 500 Index snapped an eight-day rally yesterday, as Federal Reserve Chairman Ben S. Bernanke said the central bank’s asset purchases are not on a preset course. The S&P 500 rose 0.3 percent to 1,680.81 at 4 p.m. in New York, after falling from a record high yesterday.
Apparently the market liked hearing that the Fed is not going to create an arbitrary definition of when and how the QE program is going to end. Bernanke said the central bank’s bond purchases “are by no means on a preset course” and could be reduced more quickly or expanded as economic conditions warrant. “We’re going to be responding to the data,” Bernanke said today to the House Financial Services Committee, “If the data are stronger than we expect, we’ll move more quickly” to reduce purchases. If data “don’t meet the kinds of expectations we have about where the economy’s going, then we would delay that process or potentially increase purchases for a time.” Central bank stimulus has helped fuel a surge in stocks worldwide, with the benchmark U.S. index jumping 148 percent from its March 2009 low. Fed policy makers have been debating
the timing and pace of any cuts in the central bank’s $85 billion in monthly bond purchases. Bernanke has said any reduction will be tied to sustained improvement in the labor market or an increase in inflation.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
225-342-0013
jbroussard@treasury.state.la.us
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