Bernanke Says Economy Decelerating But Offers No Hints on QE

Sign Up to Receive an Email Alert when Flash Headlines are Published

Fed Update: Bernanke Says Economy Decelerating

In prepared testimony before the Senate Banking Committee, Federal Reserve Chairman Ben Bernanke said that U.S. economic activity appears to have decelerated somewhat.

Bernanke said that the growth rate for the second quarter is looking like it will be below that seen in the first quarter and that the Fed remains prepared to take further action as appropriate in order to promote a stronger recovery.

However, the Fed Chairman offered no specific hints in his testimony that more QE was on the way. Stocks immediately sold off on the lack of any mention of more stimulative measures.

Bernanke says that the Europe crisis remains a significant stress with resulting impact on the rest of the world, including the U.S.

The Fed Chairman says the U.S. economic recovery continues to be held back due to fiscal policy uncertainty and tight borrowing conditions. However, he did mention modest signs of improvement in the housing market.

Bernanke warned that risks to economy have increased due to the fiscal cliff. He added that if the tax cuts are allowed to expire in their entirety, the U.S. would likely enter a shallow recession next year.

On the employment front Bernanke said, “Reduction in unemployment likely to be frustratingly slow.”

Traders had hoped that the Fed Chairman would offer some hints that the Fed was ready to embark on another round of bond buying known as quantitative easing. Such programs have previously caused the dollar and bond yields to fall, which, in turn, pushed prices of stocks, emerging markets, and commodities higher.

How does this report affect our short-term trading strategy? Take a Free Trial of the All-NEW Daily Decision (the new “adaptive” system is now more active and more sensitive to trend changes) to find out. Even if you've taken a free trial of the Daily Decision in the past, you owe it to yourself to check out the new system.

To learn more about our NEW “Adaptive” Daily Decision System (a 100% rules-based system designed to guide your market moves) Download our Special Report on the New "Adaptive" Daily Decision System

Other stories on the US Economy to review:

• Industrial Production Above, Capacity Utilization Below Expectations
  
• CPI Shows Inflation Flat in June
  
• Empire Manufacturing Improves in July
  
• Retail Sales Disappoint in June
  
• PPI Up in June
  
• Import/Export Prices Down in June
  
• NFIB Small Business Optimism Index Pulls Back Again
  
• Jobs Report Disappoints Again in June
  
• ISM Non-Manufacturing Index Disappoints in June
  
• ADP Employment Surprises to Upside
  
• Challenger Planned Job Cuts Best in Year
  
• Factory Orders BTE in May
  
• Construction Spending Above Consensus in May
  
• ISM Manufacturing Plunges in June
  
• Chicago PMI Headline Improves But...
  
• US GDP Grew at +1.9% Rate in Q1
  
• Durable Goods Up for First Time in 3 Mos
  
• Richmond Fed Index Declines for Third Month
  
• Consumer Confidence Falls Again in June
  
• Case-Shiller Home Price Index Improves
  
• Chicago Fed National Activity Index Falls in May
  
• Existing Homes Sales Fall But Prices Rises
  
• LEI Rises in May: Points to "Muddle Through"
  
• Philly Fed Plunges in June
  
• Housing Starts Down But Permits Up

  S&P 500 - Intraday

Remember, you are in control your email alerts! You can receive alerts for more than 25 free research report alerts including: The “10.0” Report, The Insiders Report, ETF Leaders Report, and The Focus List.