As markets enter the month of March, central bankers are sounding a bit more like “lions,” than the usual “lambs.”
Fed Chairman Ben Bernanke dealt markets a surprise Wednesday when his comments during the first of two days of Congressional testimony suggested that another round of easing may not necessarily be in store. He helped send stocks lower, the dollar higher and precious metals to their worst day in more than two months.
Traders said it was more about what Bernanke didn’t say than what he did say. “It was different because I think what we saw was Bernanke questioning the appropriateness of more aggressive easing through QE3,” said Zane Brown, fixed income strategist at Lord Abbett. “The fact it was noticeably absent in his testimony, I think indicates a change in thinking.”
Brown said it will be important to see if Bernanke raises quantitative easing in Thursday’s 10 a.m. testimony before the Senate Banking committee, and how he might answer questions related to it. The Fed had been expected by many market participants to embark on a third round of quantitative easing.Page 1 of 7 | Next Page