Ben Bernanke Delivers Calming Testimony on QE End and Tapering to Congress

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.