(As of 7:16 am PST)
Markets are cautiously optimistic in early trade with all
eyes on Federal Reserve Chairman Ben Bernanke as he gets set to testify before
the Joint Economic Committee this morning.
Bernanke’s testimony, his first since February, will hope to provide
clarity around the Fed’s strategy to exit its $85 billion per month asset
purchase program. The consensus as of
late is that the Fed will continue to proceed with its easing program, known as
QE3, while monitoring signs of inflationary pressure or an improvement in the
labor market as indicators of when to exit its bond buying. That hasn’t stopped several Fed officials
from saying they believe the Fed should begin tapering its bond buying immediately. The market has gotten used to “easy money”
and increased liquidity over the past few years. Any signs that the Fed’s programs may be
coming to an end would likely result in a market selloff. European stocks slipped with investors
cautious ahead of Bernanke’s testimony.
Asian markets were mixed with the Nikkei rallying 1.60%. Gold is higher today by 0.5% on a weakening
dollar, while oil prices fell dramatically after an unexpected rise in
inventories. We’re keeping our eyes on
Bernanke’s testimony as he was just sworn in around 7:10 am PST.
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