The Fed “stands ready”. For what exactly? Armageddon? But then it will be too late!

The “we stand ready” line has become a stale staple of Bernanke´s musings. Interestingly, simply because of the fact that Bernanke offered a “Bleak View” on the economy, at this moment the stock market is up, bond yields are up and the USD inched down relative to the euro. Seems that the markets expect a “Bleak View” to translate into “action” by the Fed. Maybe, but Bernanke, despite his “communication obsession”, remains guarded:

WASHINGTON—Federal Reserve Chairman Ben Bernanke delivered a bleak new assessment of the U.S. economy to lawmakers on Tuesday but remained guarded about what the Fed would do about the disappointing outlook.

His restrained tone about additional action by the central bank initially disappointed stock investors and pushed down the Dow Jones Industrial Average and other stock indexes.

“We haven’t really come to a specific choice at this point,” Mr. Bernanke said in answer to a question later. “We are looking for ways to address the weakness in the economy should more action be needed.”

His outlook has ‘darkened’:

Among his latest concerns was the outlook for business investment. In June, the Fed said investment was continuing to advance. But in his testimony, Mr. Bernanke marked down his assessment. Mr. Bernanke said investment had decelerated in the first part of the year and added that he foresaw “further weakness ahead.”

Although he tries to hide it, Bernanke seems to love ‘slow’ (maybe because it will keep inflation low):

He also sounded sharp concerns over the labor market, which Fed officials have made clear is central to whether they decide to enact more programs to spur growth. The Fed chief predicted that progress in reducing the country’s 8.2% unemployment rate “seems likely to be frustratingly slow.”

Meanwhile, today the Cleveland Fed released its latest “Inflation Expectations” information. Here also the picture remains ‘bleak’! The chart compares inflation expectations at mid-year for the last three years.

8 thoughts on “The Fed “stands ready”. For what exactly? Armageddon? But then it will be too late!

  1. Pingback: The Fed “stands ready”. For what exactly? Armageddon? But then it will be too late! « Economics Info

  2. …and then the deafening silence. What was there to say? Yglesias summed it up well today with this post – “Bernanke to economy: Drop dead.” I had to laugh in spite of myself.

    • Saturos – Right at the beginning I wrote:
      Interestingly, simply because of the fact that Bernanke offered a “Bleak View” on the economy, at this moment the stock market is up, bond yields are up and the USD inched down relative to the euro. Seems that the markets expect a “Bleak View” to translate into “action” by the Fed.

  3. In Feb of 2012, the CPI was 7%. in March they changed the reporting retroactively to a basis difference from the previous report. Now they are claim these < 3% number for inflation. I don't see how that's even possible. What else have they decided to exclude to get the number that low? Energy and food (2 of the main costs of living) are not included in the CPI. If you look at inflation.us/charts.html it shows more realistic numbers that reflect what we've been feeling. 25% unemployment (remember the 8% reported is the U-3 number of people still claiming. the u-6 is just an estimate which is double the u-3 and includes people not claiming.) we are great depression levels of unemployment, foreclosure and growth. we are going into the next dip following the consolidation effort of the banks after the depression. I find it interesting that Ben studied the great depression and is following it step for step producing the same outcomes. It's clear he is not working for america, he's working for the banks. the fed reserve is a private bank. He doesn't have a financial incentive to work for america, he does how ever have a financial incentive to enslave america.

    Every american should ask: why are we constitutionally allowed to print money and instead borrow it? where does the interest come from to pay for the debt when the money created is the principle? if we produce and export virtually nothing, then how do we ever escape the crushing debt?

    Bankers are criminals. They should be arrested. It worked for Iceland in 2008.

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