Oh dear. Ben Bernanke’s prepared speech in Jackson Hole, WY, doesn’t sound like it has the strong hints of economic stimulus that markets have been anticipating. Here’s Mr. Bernanke’s conclusion:
“Over the past five years, the Federal Reserve has acted to support economic growth and foster job creation, and it is important to achieve further progress, particularly in the labor market. Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.”
Stock have been rallying this summer, partly in anticipation of a Fed response to slowing economic growth and sluggish employment gains. Given that Mr. Bernanke has used his annual speech at Jackson Hole before as a platform from which to spout the benefits of economic stimulus – particularly the second round of quantitative easing – it seemed only natural that he might do the same this year.
The Dow Jones industrial average had been up about 100 points prior to the release of Mr. Bernanke’s prepared remarks on the Fed website. Shortly after the release, the Dow had pared those gains to 50 points.
Perhaps he’ll say more in off-the-cuff comments.