By David Berman
Ben Bernanke, chairman of the U.S. Federal Reserve, seems to have matched expectations in his prepared remarks to Congress on Wednesday morning, with indexes holding up relatively well. In mid-morning trading, the Dow Jones industrial average was up 0.4% and the broader S&P 500 was up 0.3%.
Mr. Bernanke pressed all the right buttons. Consumer spending has picked up, the labor market has stabilized and the U.S. economy expanded in the second half of last year and will continue to expand in 2010 and 2011.
Meanwhile, consumer price inflation will remain subdued for some time, leaving him to expect the federal funds rate to stay “exceptionally low” for an “extended period” – a widely anticipated remark that nonetheless could soothe those who felt that last week’s hike in the discount rate presaged higher borrowing costs sooner rather than later.
However, markets are now hanging on to the Q&A remarks.