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At this point investors almost know what Ben Bernanke is going to say.
The Federal Reserve Chairman told Congress yesterday essentially what he’s been saying for months: that the U.S. economy is growing at an alarmingly slow rate but not enough to warrant any further action.
In the past, such non-committals to a so-called QE3 – or a third round of quantitative easing – would have sent U.S. markets tumbling. By contrast, Bernanke’s latest wishy-washy statements have actually sent the markets up the past two days – or at least not stood in its way as investors responded to a round of positive earnings reports.
Perhaps investors are just used to it at this point. Shy of Bernanke uttering the letters Q, E and 3, it seems investors are no longer interested in what he has to say. Just look at the market’s collective shrug when the Fed announced the extension of Operation Twist last month.
That was the latest in a series of feeble attempts by Bernanke to jolt some life into an economy whose recovery has been moving at a snail’s pace.
Bernanke’s not stupid. He sees that the U.S. economy needs help. He called the jobs recovery “frustratingly slow” in his testimony before Congress yesterday.
But the impression Bernanke gave – as he has time and again in recent months – is that while the U.S. economy is slumping, he and his fellow FOMC cronies are powerless to truly stop it.
It seems investors are finally wising up to that reality.