Flash: Bernanke comments inject volatility into nervous markets - BBH

FXstreet.com (Barcelona) - Brown Brown Harriman analysts note that Bernanke's comments at midweek to the Joint Economic Committee of Congress injected extra volatility into nervous markets.

They feel that many observers see a two-fold message. The first, in prepared remarks, touted the same position as outlined in the FOMC's recent statement, but his answers to questions seemed take a different tact and a less dovish one. They feel that in order to understand Bernanke's message, one needs to understand who he was arguing against. They write, “He was responding to those who were skeptical of QE3+ and are concerned about the creation of other financial bubbles, and those, who the FOMC minutes identified as "several voters," that may be prepared to taper purchases as early as next month's meeting.” The team conclude that he was essentially saying, no, there will not be any tapering of purchases yet, and that the Federal Reserve was closely monitoring the capital markets and the risk-reward favored the continued pursuit of the Fed's strategy. Overall, they note that more data is needed to determine whether the economy has caught, in the sense of sustained growth, writing, “How much more data? A few more months. “