Home » News » Bernanke Reinstated Consumers Have Optimism
  • Bernanke Gets Another Term; January Market Data Eliminates Some Pessimism

    February 2, 2010 - The confirmation hearings of Ben Bernanke and a surprisingly strong fourth quarter GDP dominated markets last week. Fed Chair Bernanke was reconfirmed by the Senate, but with the smallest number of votes in the Fed's history. This may foreshadow some interesting battles ahead for monetary policy in the US in coming months.

    Fourth quarter releases saw an exceptionally large jump in gross domestic product. For the fourth quarter of 2009, the U.S. economy grew at its fastest pace in six years. Rising a seasonally adjusted 5.7%, the GDP exceeded several median forecasts put out by economists.

    While there were mixed reactions to Bernanke's reinstatement, many were relieved to find that consumer confidence hit a 16 month high in January, rising to 55.9 for the month. January's data was the highest reading since September 2008, though the index's numbers have been slowly changing since last May.

    As confidence is beginning to rebound back, the Federal Reserve seems to concur with the same cautious optimism of consumers. Releasing their first FOMC policy announcement of the year, the Committee is anticipating an ongoing recovery in economic activity with rates continuing to remain low for quite some time. Inflation is also likely to remain subdued for the foreseeable future.

    This week, we may have a bit more focus on economic data with the ISM reports and employment data. With signs pointing toward economic recovery, even a tepid one, a decrease in unemployment and net gain of jobs in January could affect rates into next week.


    Feb 2 2010