Bernanke Speals on Growth & Inflation in QE/QE2

On growth, Bernanke said, “Overall economic growth has been proceeding at a pace that is less vigorous than we would like.”   Bernenanke did offer up that additional accommodation is available if needed for recovery and inflation targets.

The initial take is that if things stay the same or get worse then quantitative easing would come.  The mandated target for inflation is apparently 2% or a tad less.

QE (or QE2) would likely be the purchase of long-dated maturity assets and most likely much in the Treasury notes and bonds.  Uncle Sam’s balance sheet will get to grow from bloated to stuffed.

The talk of a disappointment with employment would implying that there are real concerns that the unemployment rate will remain high and decline only slowly.

Bernanke’s full speech is available here.

JON C. OGG