Wednesday, August 10, 2011

Bernanke Jolt

The Fed gave a shot of caffeine
To the moribund stock market scene,
When they answered the pleas
To continue to ease
From now until Twenty-thirteen.

The Federal Reserve's policy statement, released yesterday afternoon, caused the stock markets to swoon and then soar, as investors reacted first to the Fed's prediction of continued economic weakness, and then to the fine print that the Fed is "prepared to employ" a "range of policy tools." Translation: more monetary stimulus. The Dow ended the day up 4%, solidly over the 11,000 mark, so the statement turned out to be quite a stimulant.


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