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The Fed Head Gives Us His Economic Outlook

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For those willing and able to spend a beautiful summer day reading Bernanke’s latest insights, line by line, on the economic outlook and monetary policy, here's a link to the speech.

One paragraph in the speech that stood out to Gluskin Sheff’s David Rosenberg was this:

“The Committee will certainly use its tools as needed to maintain price stability -- avoiding excessive inflation or further disinflation -- and to promote the continuation of the economic recovery ... the Federal Reserve remains committed to playing its part to help the US economy return to sustained, noninflationary growth.”

What's interesting, Rosie writes, is the choice of the word “return” to “sustained” growth, which implies that despite Bernanke’s high hopes for the future, this is a state (the word “return” by definition means “revert to a previous state”) we have to achieve (sustainable growth).

That’s remarkable, the strategist says, when one considers all the radical efforts that the central bank and the government have made to bolster the economy. “As we are finding out, even with an extremely aggressive central bank, just because you turn the key doesn’t mean the engine turns over,” he writes.

Alternatively, check out this cloud version of the speech provided by Paul Kedroksy over at Infectious Greed. “It's just as opaque,” says Kedrosky, “but much nicer colors.”

POSITION:  No positions in stocks mentioned.