The Real Bernanke Bombshell: He's Going Short Monetary Policy

  x You have successfully emailed the post. Looking back over Bernanke's assessment on the economy, one thing really stands out: How much he talks about spending and fiscal policy.

By our count he says the word "fiscal" 16 times.

"Monetary" shows up just 6 times.

The whole speech is basically one long message imploring Obama and Congress not to go into austerity mood prematurely.

While he does talk about possible tools available to the Fed, he obviously doesn't think the options are that exciting, and in light of the balance sheet recession (which Bernanke now seems to grasp) this makes sense: nobody wants to borrow so lending money at a cheaper rate doesn't do much.

Anyway, the dollar is rallying post-speech, perhaps on this idea that Bernanke's zeal for more easing seems limited.

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