(As of 7:25 am PST)
Big Ben has done it again. At a conference in Boston yesterday
afternoon, Bernanke indicated that the Federal Reserve would continue down its
path of maintaining financial stability by keeping interest rates low for the
foreseeable future. After 2 months of “tapering
talk”, Bernanke’s 180 degree turn caught markets by surprise sending stock and
gold futures roaring in the after-market yesterday. Today’s open saw the Dow up triple digits,
the S&P trade through a record high, and gold rebound by 3%. Although nothing new was said, Bernanke’s
message was aimed to reassure a wobbly market that the Fed would continue to
provide financial stability to markets as a part of its dual mandate of promoting
maximum employment and low inflation.
Big Ben signaled that the Fed wouldn’t rush to raise rates even after
the employment target of 6.5% was hit. Bernanke’s
message has sparked a risk on trade with all major sectors rallying today. Asian markets finished with huge gains and
Europe is higher as well. The chairman’s
remarks sent treasury prices higher with the yield on the 10 yr. falling to
2.58%. All other news is being overshadowed
by Bernanke’s remarks and it appears a day of strong market gains is at hand.
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