Business

Markets Hope for Fed Easing — Bernanke Disappoints

WASHINGTON (The Blaze/AP) — Chairman Ben Bernanke says the U.S. economy has weakened and the Federal Reserve is ready to take further action to bolster growth if conditions don’t improve. However, Bernanke provided no clues about what steps the Fed might take or whether any action was imminent.

Needless to say, this will most likely drive stocks down today.

Investors were hoping Bernanke would signal that the Fed was ready to launch another round of bond purchases (quantitative easing, or money-printing), which aim to drive down long-term interest rates and encourage more borrowing and spending.

Bernanke, giving the Fed’s midyear economic update to Congress, says the economy will likely continue to expand moderately. But he says the economy‘s meager growth would slow further if Europe’s debt crisis worsens or if Congress doesn’t address an impending budget crisis before the end of the year.

UPDATE – As predicted, Bernanke’s failure to promise further fed action has driven stocks down.

Not Today: Markets Hope For Fed Easing, Bernanke DisappointsNasdaq as of 11:20 AM EST

Not Today: Markets Hope For Fed Easing, Bernanke DisappointsS&P as of 11:20 AM EST

Not Today: Markets Hope For Fed Easing, Bernanke DisappointsDow as of 11:20 AM EST

Bernanke’s midyear report to Congress on the economy comes as job growth has slumped, manufacturing has weakened, and consumers have cut back on spending.

Bernanke acknowledged those trends. He noted that the economy, after growing at an annual rate of 2.5 percent in the second half of 2011, slowed to roughly 2 percent in the first three months of this year and likely weakened further in the April-June period.

The economy will likely continue to expand moderately, he said. But the meager growth would slow further if Europe‘s debt crisis worsens or if Congress doesn’t address an impending budget crisis before the end of the year.

“Although declines in energy prices are now providing some support to consumers’ purchasing power, households remain concerned about their employment and income prospects and their overall level of confidence remains relatively low,” Bernanke said in his testimony.

UPDATE II — As we note in our daily Market Recap, we incorrectly predicted stocks would close down because of Bernanke’s comments (or lack thereof). Stocks did not close down because of the chairman of the Federal Reserve. In fact, they managed a rather successful rally.

The Associated Press contributed to this story. This story has been updated.

Comments (18)

  • Shakespear
    Posted on July 17, 2012 at 7:39pm

    And what became of the six tons of gold that was in the basement of the World Trade Center before it collapsed?
    One might check the bank of Jerusalem! Or just ask Alan Greenspan.

    Report Post » Shakespear  
  • Shakespear
    Posted on July 17, 2012 at 7:30pm

    THIS IS NOT RACISM, IT IS A FACT.

    Who Controls the United States Economy?

    Alan Greenspan, (Jewish) former Chairman, Federal Reserve system
    Benjamin S. Bernanke (Jewish) Chairman, Board of Governors, Federal Reserve System
    Donald L. Kohn (Jewish) Vice Chairman, Board of Governors, Federal Reserve System
    Stephen Friedman (Jewish) Chairman, Board of Directors, Federal Reserve
    Bank of New York
    Timothy F. Geithner (Jewish) Secretary, United States Department of the Treasury
    Barney Frank (Jewish-Openly avowed homosexual) Chairman, United States House Committee on Financial Services
    Lawrence H. Summers (Jewish) Chairman, National Economic Council
    Christina D. Romer (Jewish husband: David Romer) Chairman, Council of
    Economic Advisers
    Paul A. Volcker (Jewish) Chairman, Economic Recovery Advisory Board
    Jared Bernstein (Jewish) Chief Economist and Economic Policy Adviser,
    Vice President
    Steven L. Rattner (Jewish) Chief Auto Industry Adviser, United States
    Department of the Treasury
    Peter R. Orszag (Jewish) Director, Office of Management and Budget (OMB)
    Douglas W. Elmendorf (Jewish) Director, Congressional Budget Office (CBO)
    Douglas H. Shulman (Jewish) Commissioner, Internal Revenue Service (IRS)
    Jon D. Leibowitz (Jewish) Chairman, Federal Trade Commission (FTC)
    Sheila C. Bair (Jewish) Chairman, Federal Deposit Insurance Corporation (FDIC)
    John E. Bowman (Jewish) Director, Office of Thrift Supervision (OTS)
    Karen G. Mills (Jewish) Admini

    Report Post » Shakespear  
  • rockymtngal
    Posted on July 17, 2012 at 1:52pm

    People today who have a savings account are not earning the interest they used to. Why? Because every time this guy talks, the less we get. The dollar has already lost it‘s value and the gov’t’s solution? Print more money or use a fake credit card and keep right on spending. IF the gov’t wanted to cut spending they would. If we can sit down and make cuts in our family budgets in order to make ends meet, we do. It is illegal for us to print money and we can’t use fake credit cards: IT’S A FELONY! Do you think I can walk over to my neighbor’s house because they have more money than I do and tell them that they have to pay my mortage payments, put gas into my car of buy food? Well, Obama thinks that’s ok.

    Report Post »  
    • NutterButter79
      Posted on July 17, 2012 at 2:29pm

      The government unfortunately is bought and paid for by the banks. It’s sad. We worry about the stock market and let that pollute our faith in the economy. If we just stopped paying attention and lived our lives, the economy would be able to come back. Unfortunately we worry too musch about what Bernanke has to say and it shakes our faith.
      Try reading this. It’s pretty good and it makes sense. It also dispels the myth that if banks fail, then America does too.
      http://revolutioninmedia.com/2012/07/17/urgent-september-3rd-day-of-action/

      Report Post » NutterButter79  
    • JRook
      Posted on July 17, 2012 at 4:22pm

      Ok, well did you get the GB and Rush induced angry rant out of your system. Perhaps you didn‘t catch Beckett’s attempt to fault the FED CHAIRMAN regardless of which action the Fed takes. If they had decided to do addition quantitative easing then I’m sure Beckett would find fault. So he finds fault in the Fed taking a wait and see attitude. This is why the “reporters” here have no credibility with anyone other than the ideological zealots who drink the lemonade and need their angry mob fix.

      Report Post »  
  • TexasIndependant
    Posted on July 17, 2012 at 12:09pm

    3 Ways Government Steals Wealth! Tax, Regulate and Print! STOP PRINTING MONEY! When money is printed it increases prices and debases currency which debases the stock market! Everyone is complaining about Taxation, and Regulations, but we let them Print money at will which is the most damaging of the 3 ways to steal wealth. Currency debasement collapsed the Roman Empire! Rome started cutting thier coins to 50% silver or gold, then 25% just so they could make more coins. We either learn from history or Fall! Assets= Currency (Its a very simple mathematical Formula) Eventually money will be worthless if this continues.

    Report Post »  
  • Altair
    Posted on July 17, 2012 at 11:54am

    “RUBIO = MexiMerica Look at his most vocal stands its the La Raza stand “For the Race Everything, For all Others Nothing”

    – BOONE2

    Rubio is of Cuban descent, meathead. Has nothing to do with Mexico or Mexicans.

    Report Post »  
  • Individualism
    Posted on July 17, 2012 at 11:29am

    QE 3 is probably going to happen after Obama gets relected, so buy before november and when economy tanks sell it for close to max profit.

    Report Post » Individualism  
  • Detroit paperboy
    Posted on July 17, 2012 at 11:21am

    Boone, you will vote for Obama regardless, and who is this WE you speak of ???

    Report Post »  
  • KidCharlemagne
    Posted on July 17, 2012 at 11:16am

    In effect, this shows you how over time that Wall Street (“user”) has developed an addiction to Bernanke’s (“pusher”) quantitative (QE) programs (“narcotics”).

    If Wall Street doesn’t get its “fix” from Chairman Bernanke, then equity values start dropping like a stone.

    Report Post »  
  • Snowleopard {gallery of cat folks}
    Posted on July 17, 2012 at 10:56am

    Take the Federal Reserve and dump it into the ocean along with the UN. I will figure the next QE will occur near the elections; and instead of one “October Surprise,” Obama will have many of them to be dumped on all of us instantly – new programs to his base, new budget busting executive orders, and so forth; this assumes he has not invoked martial law by then.

    Report Post » Snowleopard {gallery of cat folks}  
  • Detroit paperboy
    Posted on July 17, 2012 at 10:52am

    My goal in my businesses is to NOT hire anyone until Obama is long gone, employing people has become such a headache and a nightmare, it’s a wonder anyone still has a job…….who needs it.

    Report Post »  
    • TSUNAMI-22
      Posted on July 17, 2012 at 11:49am

      You should take it one step further and tell your employees that if Obama gets elected again that you’ll close your business down.

      In my opinion, this is a movement who’s idea needs to start getting passed around to between employers.

      Like Obama himself so eloquently stated “you didn’t build it”. Well, then we won’t be held in contempt for closing something “we didn’t build”.

      Tax that.

      Report Post »  
  • pap pap
    Posted on July 17, 2012 at 10:52am

    Kill the Fed.

    Report Post »  
    • oldguy49
      Posted on July 17, 2012 at 10:57am

      i relly love the part where the fed knew about all the fixes before the 07 tarp crap and did nothing about it

      Report Post »  
    • Want our country back
      Posted on July 17, 2012 at 10:58am

      http://www.obamanomicsoutsourced.com/

      This puts it all in perspective…. staggering info.

      GOP2012

      Report Post » Want our country back  
    • Boone2
      Posted on July 17, 2012 at 11:08am

      If Romney chooses Marco Rubio for VP we will hold our nose and vote for Obama.
      Rubio is a La Raza Operative in disguise.
      He has most recently tried to shove the Dream Act Amnesty down our throats.
      He whinned like a baby when Obama beat him to the Amnesty punch without including him.
      Rubio has shown his true colors he is without a doubt a Racist that has the La Raza backing him no matter how he tries to cover with a conservatism cloke, he can not hide it, nor has he,
      Wake Up America, Rubio would like nothing better than to continue to flood the U.S.A with millions upon millions of Illegal Aliens and to completely destroy this country as we know it.
      RUBIO = MexiMerica Look at his most vocal stands its the La Raza stand “For the Race Everything, For all Others Nothing”

      Report Post »  
    • yiska8
      Posted on July 17, 2012 at 1:59pm

      After reading “The Creature From Jekyll Island”, I cannot believe the FED scheme has gone on this long.

      Report Post » yiska8  

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