Round Two for Bernanke!

Do Fed chairmen always say, “"the FOMC...will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks."? When wouldn’t this be the case? Federal Reserve Chairman Ben S. Bernanke signaled the U.S. central bank is prepared to lower interest rates again even amid signs of accelerating inflation. Bernanke's remarks may reinforce investors' expectations that the central bank will lower interest rates further to help a faltering economy. Durable Goods fell 5.3%, New Home Sales fell last month to the lowest level since 1995 in spite of price declines. The odds favor another 50 basis point cut in overnight rates at the March 18th FOMC meeting.

What is the market up to today? GDP came out – unrevised at +.6% for the 4th quarter. That, and the Jobless Claims number (Initial claims jumped by 19,000, to 373,000 from an upward-revised 354,000 reported last week), has sent the yield on the 10-yr down to the low 3.70’s again, and mortgage prices are better by .375-.750, depending on the coupon. Today is Round 2 for Bernanke as he testifies before the Senate on the last day of his semi-annual policy presentation to Congress, and we also have Freddie Mac’s fourth quarter results today

Did you hear the one about the young man who was asleep on Monday morning and his mother came in and woke him? "Son you need to get up and go to school". He responded "Mom all the kids hate me, the teachers don't like me and I am not going to school." The Mom said, "Son you must, you are the principal and they are counting on you!"

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