Global stock markets are once again rallying on the words of Fed Chairman Ben Bernanke. Just two hours after the Fed released meeting minutes showing a split among policy makers, Bernanke told a meeting of economists that the Fed needs to continue its “highly accommodative monetary policy” for the foreseeable future.”
Then, U.S. stocks, which had just ended a lackluster session, took off, and the rally continued overseas and into today - the S&P500; is trading up about 1%.
Related: Ignore Feldstein, Fed Should Taper in 2014: Dean Baker
“Bernanke made it absolutely clear that policy in his view was going to remain highly accommodative both looking at inflation and unemployment,” says Danny Blanchflower, a Dartmouth College economics professor and Bloomberg TV Contributing Editor.
The message was not what many in the market had expected. Investors were anticipating the Fed would start reducing asset purchases as early as this year, based on what they thought Bernanke had hinted at after
Read More »from Investors Got It Wrong Last Month, ‘Follow the Data’ & Expect More Fed Stimulus: Economist