The highly awaited speech from Fed Head Ben Bernanke at the Economic Club of Minnesota is out, preempting the President Obama speech this evening.  What is interesting is that the speech has much of the same wording and tones used most recently in the Jackson Hole speech.  The good news for stocks is simple: Bernanke is still leaving the door open for more stimulus. The bad news is that no real meat is being shown.

What is amazing is that the speech notes that the central bank is expecting the recovery to slowly strengthen over time.  Fed officials have been talking down this notion in recent days, so what rabbits can he pull out of the hat?

There is a whole section on monetary policy but no formal promise other than to discuss at the new two-day FOMC meeting later this month.  Bernanke does highlight several economic weak spots, weak consumer spending, European debt woes, low confidence, and a moderation of inflation.

The hope here is simple.  Let’s hope that Bernanke is choosing to not overshadow President Obama ahead of his key speech this evening.  If that is not the case, the speech feels a bit out to lunch.

The conclusion includes the following: “Thus I do not expect the long-run growth potential of the U.S. economy to be materially affected by the financial crisis and the recession if–and I stress if–our country takes the necessary steps to secure that outcome… The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a context of price stability.”

The full speech is here.

JON C. OGG

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