The next steps in the Federal Reserve’s attempt to guide the economy through recovery could come to light today when Chairman Ben Bernanke delivers a speech likely to garner significant market attention.
While an address two days before a major holiday otherwise might not get much notice, chatter has increased that Bernanke will indicate additional stimulative measures from the central bank.
“His normal logic is to indicate things and flag things well in advance so he can push different members of the (Open Market) Committee into the same direction,” said Torsten Slok, chief international economist at Deutsche Bank. “There’s a good chance that he will come out and say that he continues to be worried about the outlook today.”
How that worry manifests itself is likely to come in the form of additional asset purchases aimed at keeping the economy on a path forward, and steering investors towards riskier assets.
Consensus is that ultimately the Fed will continue to buy about $40 billion worth of mortgage-backed securities per month and halt its Operation Twist program at the end of the year.
Read More at cnbc.com . By Jeff Cox.