(Image Source: Christian Science Monitor)


BY MARC STEIDLER
 
Last year Fed Chairman Ben Bernanke’s Jackson Hole speech was a turning point for
stocks. This year, ABC expected more big news to help a slowly growing economy.

 
“It’s a gathering for central bankers and the idea being people really anticipating
the Fed is going to do something, or at least give some kind of hint because the Fed
chairman has already been talking about some of the options that are possibilities,
in terms of helping from the Central bank’s perspective to stimulate the economy.”

 
But Bernanke says there are no plans for more quantitative easing – for now. Instead the
New York Times reports Bernanke chided the politicians on Capitol Hill.

“In remarks that went well beyond his previous calls for Congress and the White
House to address the nation’s long-term fiscal challenges, Mr. Bernanke suggested
the process itself was broken. ‘The country would be well served by a better process
for making fiscal decisions,’ Bernanke said.”


Stocks rode the roller coaster after Bernanke’s speech, with the Dow dropping 200
points before recovering. But The New York Daily News took a long-term view, saying
Bernanke’s comments were encouraging for investors with an eye on the future.

“Stocks turned positive in midday trading Friday as investors focused on upbeat
comments by Federal Reserve chairman Ben Bernanke about the economy’s long-
term prospects.”


Looking short-term, London’s Telegraph reports traders would be happier with a more
active approach from the Federal Reserve.

“More QE was the easily digestible solution. The initial $1.7 trillion of QE lifted
stock markets and bolstered the recover. The second $600bn round, unveiled by
Bernanke at his Jackson Hole speech last year, had much the same effect, albeit
reduced. Economists are divided over whether QE3 would work at all, but traders
can at least reference its track record.”


Also from across the pond, MarketWatch notes reaction to Bernanke’s speech looks bleak.

“European stock markets extended their losses Friday as Federal Reserve
Chairman Ben Bernanke put off any discussion of further easing measures until the
next Federal Open Market Committee meeting…”


Meanwhile, U.S. Economist John Ryding tells MSNBC investors are overreacting to the
news of Bernanke’s hold-tight stance.

 
“So we have to ask ourselves: ‘Are things really that bad?’ And we don’t think they
are. They’re not great. But I don’t they’re as bad as the fear indicators have them in
the market. And generally people have done well when they have bought at times of
great fear.”


Bernanke’s decision to hold steady may not last long, as the Fed is set to meet on
September 29 and 30th at its annual policy meeting. Bernanke made the decision to add
an extra day to the policy meeting Friday in Jackson Hole.

Want to see the full text of Chairman Bernanke’s comments?  We have a link to them, in our transcript sections.
 
Transcript by Newsy.

U.S. News: Bernanke Jackson Hole Speech

Fed Chief Bernanke Urges WH to Aid Recovery

August 26, 2011
(2:47)
Bernanke said there won't be more quantitative easing -- for now. He also said quarreling politicians stand in the way of much needed policy making.
   
TRANSCRIPT

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