Watch Ben Bernanke's Testimony To Congress Live, "Prepared To Respond If Stimulus Needed"

Tyler Durden's picture

Watch live the first of two official monetary policy testimonies by Ben Bernanke, today being before Congress, and thus Ron Paul, tomorrow before the Senate. Among the critical items to be discussed are the role of fiscal policy, whether there will be QE3, and how (and when) the Fed will proceed with future rate hikes. Mostly, it is expected be a whole lot of hot air. Full text of the report can be read here. The reason everything is surging is because, as predicted, the Chairsatan appears to have just ushered in QE3: "The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support. The Federal Reserve remains prepared to respond should economic developments indicate that an adjustment of monetary policy would be appropriate."

Key speech highlights:

  • Fed's Bernanke says economy could evolve in a way that would warrant move to less accommodative policy
  • Fed's Bernanke says given uncertainties about recovery and inflation, Fed remains prepared to adjust stance of policy if appropriate
  • Fed's Bernanke says possibility remains that weakness more persistent than expected, deflation risks may return implying need.
  • Fed's Bernanke says most recent data attest to continuing weakness of labour market, unemployment rate to decline only gradually
  • Fed's Bernanke says recent weaker-than-expected economic performance appears to be the result of temporary factors
  • Fed says debt ceiling debate hasn't affected Treasury prices yet
  • Fed's Bernanke says inflation has picked up so far this year, but more of recent rise appears likely to be transitory


For those curious, Citi's Steven Englaprovides a backdrop for how FX (which is where the vol and the leverage is, and thus is far more important than stocks) may interpret the testimony:

The Bernanke testimony baseline:

  1. Growth is sluggish, for reasons that can not be attributer to special factors -- that was the FX market takeaway from yesterday's Minutes
  2. QE3 not on the radar screen now
  3. Hikes not on the radar screen now

As we saw yesterday, small and possibly unintended deviations, from expectations of Fed policy can have visible currency effects.

We note in particular that our economists expect Bernanke to indicate a 'somewhat stronger' H2 outlook and unusual uncertainty. Yesterday FX investors saw persistent bearishness on the growth outlook in the Minutes. If Bernanke emphasizes that the Fed still sees growth as bouncing back, even tentatively, some of this pessimism may be unwound. Given that the market does not price fed funds at 50bps until the beginning of 2013, even modest optimism or hawkishness on inflation could trigger some backing up of rates and by implication currency knock-on effect.
The USD downside is if the Fed Chairman 'buys into' the weak payroll data and opens the door to QE3, as the best stimulus option out of a set of bad choices. Given the history of QE2, the initial reaction would be equities positive and USD negative.  If he were to open up this door, the major beneficiaries by far would be commodity currencies, AUD, CAD, NOK, and related EM currencies (with possible spillovers into commodity prices themselves).. Given the QE2 experience investors will anticipate more of an impact of nominal asset prices than on real GDP, so the more sensitive the asset is to liquidity, the better it is likely to do.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
TaxSlave's picture
Watch Ben Bernanke's Testimony To Congress Live



French Frog's picture

by the sound of it, there must have been a hint of more easing in his prepared speech looking how stocks and €/$ have just gone up 


edit: apologies...if i'd look up rather than giving up on the video feed i'd have realised that this was already stated by ZH

TheTmfreak's picture

So now Bernanke is saying "Temporary" instead of Transitory. Nice. I like to know how prices will "come down" when the dollar is intentionally kept low, meaning the cost of gasoline (regardless of other factors) could possibly come down? Hum....


Edit: Well I was wrong. There goes the transitory nonsense again.

gmrpeabody's picture

Watching Barney Frank makes me want to give my breakfast back.

TheTmfreak's picture

Just wrote basically the same thing. While I'm not going to disagree with 100% every thing he says. The classic "even a blind squirrel gets a nut" applies in this situation.

TheTmfreak's picture

IS BIG BEN CRYING? Wow. haha. He is quivering for real. Clearly Ron Paul has broken his monotone coooool roboticism.

RockyRacoon's picture

Dr. Paul gets the truth out of Bernanke:   "Is gold money?" -- Bernanke says, "No."   Dr. Paul:  "Why do banks hold gold?"   Bernanke:  "It's an asset."   Dr. Paul:  "Why don't they hold diamonds?"   Bernanke:  "It's tradition."

There ya have it in a nutshell.   Ben got bent over the barrel.

TheTmfreak's picture

I was definitely blown away during that part. Glad I was watching just for that.

TheTmfreak's picture

So apparently is Linkedin and Angry Birds stock. Bernanke's words are probably an asset as well.

eureka's picture

All for love of US empire, which will die without such assets.

TheTmfreak's picture


fallout11's picture


Gents, you just know QE# will be here any day now. No other path left but to inflate to the moon. USD = the new reichmark

eureka's picture

Zieg Heil NAZImerikan Federation MUST RULE - PRINT PRINT PRINT.

dark pools of soros's picture

why hold pennies(bullets) when they get to hold gold(nukes)?

arby63's picture

Guaranteed eventually worth more than any other "asset" on the planet. Time will prove this absolutely correct; and the clock is ticking.

TheTmfreak's picture

I know I'm being redundant but Barney Frank is a completely and total moron. He keeps saying "reducing the debt." Nobody, not even Rand Paul (but he states this) is talking about reducing debt, rather deficit. Funny how some on the House Financial Services Committee cannot distinguish the difference.

Ok so "deal with the deficit later." I want somebody just one person to talk about interest on the debt increasing. If Ron Paul would ask this question and put somebody the spot to answer it, it would make my day. I'm not going to expect any answer to debt interest.

Max Hunter's picture

Not only is our Congress dumb as a box of rocks (most of them) they are also for sale to the highest bidder.. Pretty bad combination.. This will not end well..

I agree Barny is very difficult to listen too and even harder to watch at the same time..

Don Birnam's picture

I assumed Bernanke must be speaking ex cathedra somewhere in D.C. :

As this is written, silver is riding the Orion booster to $ 38.07.

SWCroaker's picture

I had always thought that the word transitory meant "in a state of transition", where the word temporary meant more "at a current state only for a bit of time".   The two aren't quite the same, and technically neither word hints at the nature of the following state.  You could conceivably "transition" from low, to higher, to higher still, and still describe that movement as "transitory".  Each level held on the climb could in turn just be at that level "temporarily". 

See, the Chairsatan has been speaking the truth all along.  Up to now, he's been saying that inflation, in his view, "is in a state of transition".  Now things have reached a cusp of serious movement, and it is more accurate to claim that inflaiton levels are "probably about to change from their current state".

Not his fault if the media/world has atrophied language skills and can't read the subtle nuances in his word choices...

TheTmfreak's picture

So you're assuming that when he uses the word transitory that he means it to the specific definition of what you say? I can clearly see and understand your specific definitions, and I'll yield to that point.

However, from what I gather, his language means transitioning through a "soft patch" and then back to "normal" ok levels. Meaning the same as temporary.

SWCroaker's picture

I'm only half pressing tongue to cheek when I remark on his odd use to date of the word transitory, and subsequent change to the word temporary. 

IHMO, the Fed Chairman is a vewy vewy cwever weasel when it comes to word choice.  He's apt to pick words with multiple meanings, and often lean on the 4th or 5th obscure definition when it suits him.  Given that we're trying to diagnose the speech of an intelligent individual, one who prides himself on his mastery of language, I'd think twice about the fact that he has altered the word he is using to characterize a situation.  He sees some difference, that is almost certain.

The "return to prior state" assumption is an assumption, as strict definitions of "transitory" and "temporary" do not imply what comes next.  The listener may assume that further qualification, but Ben would be justified in claiming he never said that.

TheTmfreak's picture

Depends on whos definition of justification you might take. I'd say he could say that, but I wouldn't let him get away with him.

Its very clear from his ridiculous outlooks is that things will "get better" if things kind of stay as the status quo (with debt ceiling raised).

Edit: He just (in my mind) accepted this statement, when he was questioned about "being transitory and then residing."

Sleepy Weasal's picture

So maybe this is the summer of recovery...the last one was both transitory and temporary. 

Cone of Uncertainty's picture

Don't let that fucking happen again.

bonddude's picture

For the first time I like Maxine Waters. She's roasting the Bernank on the Real Housewives of

Wall Street. hahahahaha

DavidC's picture

A succinct and pithy response - which made me laugh!


tarsubil's picture

Ben is just so stiff, so haggard, so robotic in his reading of his statements. I wonder what would happen if he went a day without medication/narcotics.

fuu's picture

Silver over $38.

Thanks Ben! +1.94/oz

redpill's picture

And rising!  PMs going orbital.

dark pools of soros's picture

you sound like a stock pumper...  wasn't silver at $48ish?  keep the oven door closed while it bakes..

dark pools of soros's picture

ha i get junked for this..   i was one of the few on here that actually sold at $48 and bought back down at $41 and $36..  so i don't mind the small recent run but how about all you 'NEVER SELL' crew..  how can you get excited at $38? or even $45?  you act like you are getting rich but you never make any realized gains anyway..  just die already

fallout11's picture

Disturbingly prescient comment there dark pools.

The selling price in fiat script is immaterial if one never sells for fiat script.

jerry_theking_lawler's picture

i wonder how many Chinese this is gonna piss off....oh yeah, and Russians, too....

slaughterer's picture

I do not see one sign of "deflationary pressure" on the market today.  The market can forget about QE3 if it maintains this trajectory.  BB's Catch 22.

Dr. Engali's picture

Inflation in check......soft patch....transitory...blah blah blah

Paper CRUSHer's picture

Careful there Doc'.......Benny Boy stated 'soft recovery' not 'soft patch.'

Its still good to know that the Fed has reached a consenus on an exit strategy once the economoney recovers.Roughly translated....never.



Translational Lift's picture

This is like watching a toilet back up..............

francis_sawyer's picture

Welcome to today's "jerkle cirk"... Pull up a chair an prepare to get hosed

francis_sawyer's picture

good one!... definitely a "fuster cluck"

GoinFawr's picture

What a bunch of cunning stunning stunts.

caerus's picture

lol..."economic uncertainty"

A Man without Qualities's picture

= we know it hurts but we haven't finished transferring what's left of the middle class's wealth to the banks....