What Bernanke Eluded To Is Not New
Am I the only one on this planet who remembers last week on Thursday afternoon it was announced that the Fed would start slowing down the stimulus program this summer?
Given that the economy has not tanked as some expected, while showing "decent" improvement, a case can be made that the Fed should act in a manner to prevent inflation.
This was announced last Thursday afternoon with 40 minutes left of trading in the markets and the reaction was negative.
Why did all of the analysts believe that Bernanke would say everything is rosy and nothing’s going to change? I can understand the thinking behind that because he didn’t want to rock the boat, allowing the market to continue flowing. But that’s far from what Bernanke was thinking when he went before Congress.
His comment to Congress about a potential tapering of the stimulus program caused stocks to come off their highs.
It appears that the market, like a spoiled child, threw another tantrum because of the lack of clarity on a green light on current QE measures. Are they going to continue indefinitely?
The market, somehow, wanted Bernanke to say there will be no tampering with the stimulus through 2013, but that didn’t happen. It didn’t happen last week! It was announced that they could do something as early as this summer - it's old news!
The continuation of the stimulus will be “data-dependent” and how well the economy continues to perform will depend on when the easing takes place.
I knew this from last week and I knew it would come out today, and I knew the market would react negatively to it. Why didn’t anybody else write about this -- it is not new!