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Bernanke Reassures Markets Easing to Continue

Fed Chairman Ben Bernanke reassured the market about the continuing efforts of the US QE program. He was earlier reported to close ranks and disallowed members of the Fed from spouting diverging views. It seems the Fed want a unified front. Given the situation in Europe it will be viewed as the right tonic for the market.

Cyprus does not pose a threat to the U.S. economy or financial system and there are no signs of stock market bubble, Fed Chairman Ben Bernanke said on Tuesday.

The Fed chief told reporters that the central bank was monitoring the situation in Cyprus. “At this point, we’re not seeing a major risk to the U.S. financial system or the U.S. economy,” he said.

Bernanke added, “The only way they’d create a problem is if the runs become contagious in some sense and other countries lost confidence.”
And while the cheap money supplied by the Fed has pushed up stock prices, Bernanke said the central bank isn’t measuring the success of its policies against moves in stocks.

He also said the recent advance was not out of line with historical patterns. “I don’t think it’s all that surprising that the stock market would rise given that there has been increased optimism about the economy and… profit increases have been substantial,” he said.

via CNBC [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza