By Jesse Herman, contributing editor
Chairman of the Board of Governors of the United States Federal Reserve, Ben Bernake, spoke about inflation to the congressional Joint Economic Committee. In an attempt to dissect what he said, though, it seems he was simply worried about “mind control” or “market control.”
Not that today’s news was completely neutral but it did not exactly tell us any thing new.
Here is a brief outline of what was said:
- Inflation is down right now mainly because energy costs are down
- Economic growth has cooled because of a substantial correction in the home mortgage housing market
- Business spending will pick up
- Consumer growth will move the economy forward
- Subprime mortgage problems are currently self contained
Certainly, nothing groundbreaking was indicated by Chairman Bernanke. With the unstable outlook of many, though, Bernanke’s statement may provide relief.
Every word of a man in his position is clung onto. To further illustrate that point, just look at the uproar retired chairman Allen Greenspan caused when he spoke of a possible recession.
The economy depends on investor and consumer spending. The power of spoken word can influence spending positively in the short-term. The overal progress of 2007 could be a significant long-term indicator towards the future of the market.
