Analyst View: Bernanke: Strong, stable dollar good for U.S.

By @ibtimes on

Federal Reserve Chairman Ben Bernanke said on Wednesday a strong, stable dollar is in U.S. and global economic interests but could not say how long the Fed would maintain the loose monetary policy that has been blamed for its current weakness.

COMMENTS:

MOHAMED EL-ERIAN, CO-CHIEF INVESTMENT OFFICER AT PACIFIC INVESTMENT MANAGEMENT CO.

He provided a good and informative context for the FOMC's economic projections, thinking and policy stance. He dealt skillfully with difficult questions, albeit somewhat tentatively at a couple of times and by eluding some issues rather than addressing them directly.

DAVID JOY, CHIEF MARKET STRATEGIST, COLUMBIA MANAGEMENT, BOSTON

His tone seems a little professorial, in the sense of feeling it is necessary to explain what he means by certain statements. For example, why zero inflation is not a target.

CARY LEAHEY, MANAGING DIRECTOR AND SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK

Unlike Trump, Bernanke does not crave the spotlight. So he is doing this because he thinks it is the right thing to do, not to promote Bernanke, Inc.

CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO-MITSUBISHI UFJ, NEW YORK

The Chairman gets an A+ for effort in the attempt to expand market communication and downplay those more critical voices on the fringes of the FOMC. We need to know what the Fed's central case is and the press conference underlined that.

For the overall grade, I would trim it to an A- because it seems the original reasons for QE2 are gone now, and I would have liked to see some acknowledgement on the Fed's part that this low interest rate world will not be with us forever. The unemployment rate is falling so it is no longer as appropriate for the Fed to have their foot down hard of the gas pedal.

MARKET REACTION:

STOCKS: U.S. stocks were little changed after the news conference started, remaining slightly higher on the day.

BONDS: U.S. bond prices were held near session lows.

FOREX: The dollar remained weak versus the euro, keeping near session lows.

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