Reports of a letter from Fed Chairman Ben Bernanke to Darrell Issa, chairman of the House Oversight and Government Reform Committee, are offering a boost to financial markets going into the weekend ahead of what will likely be a quiet pre-holiday week. The communication was not immediately seen on the FOMC nor at the sites under Darrell Issa and the House Oversight and Government Reform Committee.
The vague language around the reports in summary is that Ben Bernanke said that there is scope for additional easing and stimulative measures that the Federal Reserve can take to maintain the fragile economic recovery we have seen so far. The letter was actually dated on Wednesday and sent by Ben Bernanke to California Republican Darrell Issa.
We would caution here that the minutes of the last FOMC meeting also came out this week and contained language showing one more inclination to start another round of quantitative easing. This is ahead of the symposium next week in Jackson Hole, Wyoming where Fed-watchers expect more details about what the FOMC can (or will) do.
JON C. OGG