Bernanke spoke today in Atlanta at the International Monetary Conference. 

Here are some of the important highlights:

  • Accommodative monetary policies are still needed
  • The US economy is growing well below potential 
  • Sees 'prospect of increasing fiscal drag' on recovery
  • Hiring accelerating in second half of this year
  • Economic growth uneven and frustratingly slow
  • Growth likely to pick up in 2nd half of this year
  • U.S. urgently needs a credible long-term plan to address budget deficit
  • Recent increase in inflation a concern, but not much evidence that it is becoming broad-based, ingrained
  • Labor market slack, weak wage growth should continue to have moderating effect on inflation
  • Long-term inflation expectations reasonably stable; FED will monitor inflation expectations closely
  • Unlikely commodity prices to keep rising at recent rapid pace; most FED officials see recent inflation rise as transitory
  • Cannot consider recovery to be truly established until we see a sustained period of stronger job creation
  • FED'S efforts to keep inflation low is a positive factor for Dollar

The market reaction to Bernanke's speech was a risk off outcome. 

S&P equities fell from 1291 to daily of 1283.5 before closing at 1286.