December 16, 2017 7:18 pm

U.S. stocks rise after Bernanke’s announcement

By G+ Author: Elizabeth Steinfeldt.

Bernanke announcement

Federal Reserve Chairman Ben Bernanke’s announcement in regards to foreseeable economic stimuli drove U.S stocks to an upward rally yesterday.

More specifically, the S&P 500 rose 0.4 percent to 1,682.15 at 12:21pm, in New York yesterday. The Dow Industrial Average soared 23.80 points to reach 15,475.65 today. As Stephen Wood, chief market strategist who oversees $174 billion at Russell investments said to Bloomberg “The market is responding to the fact that the Fed is not going to create an arbitrary definition of when and how the QE program is going to end.”Mr. Wood continued the “The Fed is going to respond to the data and they want to maintain flexibility in their policies”

Mr. Bernanke also announced that the central bank is planning to modify monetary policy, by reducing the number of bond purchases, during the year, a decision that will be susceptible to new economic data. More specifically, the Fed Chairman said that provided the unemployment rate continues to decline towards the 5 percent target and the inflation rate also approaches the 2 percent target, it should be expected from the bank to ease the monthly bond purchases, during the upcoming months.

Finally, he highlighted the importance of providing the market with enough information about upcoming monetary policy decisions to avoid risky market positions, such as build-up of excessive leverage.

“The Fed is going to respond to the data and they want to maintain flexibility in their policies”

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Elizabeth Steinfeldt

Elizabeth Steinfeldt

Writing/Blogging about Finance, Investing, Economy, World News!