Federal Reserve Chairman Ben Bernanke is testifying in his semiannual report to the Congress on Wednesday. The stock, bond, commodity and currency markets are trying to find anything new or any hints of wavering from Bernanke’s comments last week. The long and short of the matter is that Ben Bernanke is trying to calm the minds and tempers of financial market participants with the notion that quantitative easing and bond buying will not end any time soon. At the same time, he is outlining the start of tapering and an eventual exit.

Some of Bernanke’s points continue to remain static. He said:

The economic recovery has continued at a moderate pace in recent quarters despite the strong headwinds created by federal fiscal policy. … With unemployment still high and declining only gradually, and with inflation running below the Committee’s longer-run objective, a highly accommodative monetary policy will remain appropriate for the foreseeable future.

Other points are as follows:

• Housing has contributed significantly to recent gains in economic activity.
• Conditions in the labor market are improving gradually.
• Consumer inflation has been running below the committee’s longer-run objective of 2%.
• Committee projections: GDP growth beginning to step up during the second half of this year, eventually reaching a pace between 2.95 and 3.6% by 2015. They projected the unemployment rate to decline to between 5.8% and 6.2% by the final quarter of 2015. And they saw inflation gradually increasing toward the committee’s 2% objective.
• Committee participants agreed in June that it would be helpful to lay out more details about its thinking regarding the asset purchase program.

FULL BERNANKE PREPARED REMARKS

With the markets having much time before the open, the S&P 500 is up three points and the DJIA is up less than 10 points. We also have the yield on the 10-year Treasury note at 2.51%, and gold is up more than $4 at $1,295 per ounce.

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