Just when the markets thought the economy was getting better, Federal Reserve Chairman Ben Bernanke came out with a reminder Monday that the labor market remains weak and that the Fed could still do more easing if needed.
In a speech to the National Association for Business Economics ahead of the market open, Bernanke left the door open to more quantitative easing but without actually promising any more.
While not a departure from his previous comments, traders took Bernanke's speech to mean that Fed action is still a strong possibility.
The Fed chief's comments sent stocks higher , the dollar lower, andbond yields lower.
“Bernanke effectively advised the markets you need to keep some odds in,” said David Ader, chief Treasury strategist at CRT Capital.
In his speech, Bernanke discussed the weak labor marketand said the economy needs to grow faster if it is going to create enough jobs to reduce unemployment.
”He defended Fed policy, leaving without question the door open to QE3, if not in April, then in June,” said Tony Crescenzi, Pimco portfolio manager and market strategist. “Clearly, Bernanke still has an easing bias. This emphasis on long term unemployment shows it.”Page 1 of 5 | Next Page